• USD/JPY closed above 23.6% Fibo retrace of 158.85-139.89 drop at 144.36 Thur

• Extends peak to 145.91 Friday before setback to 145.05 (EBS)

• Option buyers of strikes toward 50-dma/38.2% Fibo resistance 146.89/147.14

• However, FX Options maintain a firm risk premium for downside strikes

• 1-month 25 delta risk reversal trades 1.8 JPY calls over puts on Friday

• 1-month implied volatility lifted back to 12.1 from 11.7 amid spot setback

• Implied volatility and risk reversals off peaks but above pre tariff lows

• Shows market still wary of spot volatility and losses

• NFP is near term volatility risk. Big option strike expiries surround

• FX Options wrap
USD/JPY risk reversals and premium for JPY calls over JPY puts


USDJPY FXO implied volatility


JPY=EBS

(Richard Pace is a Reuters market analyst. The views expressed are his own)