• USD/JPY options posted the biggest bounce amongst G10 FX peers this week

• 1-month implied volatility from 9.5 to 11.3 and holds firm for now

• 3-month expiry from 9.9 to 11.0 and 1-year 9.75 to 10.3

• Risk reversals recovered volatility premium for downside vs upside strikes

• 1-month expiry 25 delta from 1.5 to 2.55 and 3-month 1.7 to 2.65

• Shows market still wary of USD/JPY volatility and spot losses

• Much of the demand for options is 3-month - after 90 day China tariff truce

• FX options wrap - FX hedging opportunities abound
USD/JPY 25 delta risk reversals


USD/JPY FXO implied volatility

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