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Sep 29 - 06:55 AM

USD/JPY - FX Option Gains Faded As USD/JPY Runs Out Of Steam

By Richard Pace  —  Sep 29 - 05:07 AM
  • USD/JPY option premiums rallied with spot, rewarding dip buyers nL1N2QU0EH

  • However, those gains being faded - sellers of implied volatility from highs

  • LDP election has passed, should maintain status quo for politics and JPY

  • U.S yields peak and risk aversion bites - takes wind from USD/JPY bull sails

  • Options clearly booking some profits as USD/JPY runs out of steam for now

  • Price action not ruling out further USD/JPY gains, but perhaps limited

  • Further implied volatility sales can suggest return to more familiar range

  • But, while risk aversion and month end flows dominate, setbacks likely tame


For more click on FXBUZ


USD/JPY 1-month expiry option implied volatility Click here

Source:
Refinitiv IFR Research/Market Commentary

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