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Sep 11 - 05:55 AM

USD/JPY - Eyes Big Events Next Week, But Can It Break-Out?

By Richard Pace  —  Sep 11 - 04:35 AM
  • USD/JPY 105-107 since early Aug. Bids Wed's 105.79 low, Offers 55-dma 106.41

  • New Japan PM elected Monday, Wed's is FOMC, Thurs BoJ policy meeting

  • Suga certain to get new PM role so risk minimal, and BoJ expected unchanged

  • FOMC is biggest short term volatility risk, but range break deemed unlikely

  • USD/JPY option implied volatility remains well below the main USD pairs

  • Sellers of n-term expiry options both sides of range - betting it holds

  • However, risk skewed to downside - JPY call options hold premium to puts

  • Big expiries next week can help contain - most in 106.00-50 range




USDJPY option expiries Click here

Benchmark 1-month implied volatility Click here

Source:
Refinitiv IFR Research/Market Commentary

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