By Robert Fullem — Oct 23 - 12:40 PM
USD/JPY's surge and breach the key 152 level coincides with a flurry of topside option activity
About $1.8 billion of options on DTCC Wednesday have strikes set above 160 with expiry dates as early as January
Some strikes are above the multi-decade USD/JPY high of 161.96 reached in July
Much of the option price movement is in longer-dated tenors as both the yen and US equities slide
USD/JPY 1-yr. implieds are set to close at the highest level since March and 10-delta risk reversals are the least bearish since July as butterflies pop
Demand for long-dated yen puts is occurring ahead US and Japan elections and upcoming policy meetings
Spot is settling as traders await comments by BOJ Governor Kazuo Ueda later Wednesday
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Source:
Refinitiv IFR Research/Market Commentary