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Aug 28 - 07:55 AM

USD/JPY - Threatens Recent Lows By 105.00 And Options Panic Buy

By Richard Pace  —  Aug 28 - 05:50 AM
  • Overnight sellers ahead of 100-dma 106.99 well rewarded by 150 pip drop

  • News of PM Abe resignation the catalyst, initial uncertainty weighs USD/JPY

  • Break of 76.4% Fibo 105.10-106.94 at 105.53 opens potential for full retrace

  • Buyers expected near 105. Options panic buy volatility/downside protection

  • They had sold post Powell, and when Suga said PM Abe would serve full term

  • Huge gains since - benchmark 1-month implied volatility 6.15 to 7.3

  • Biggest short term spike since late July. Additional premium for JPY calls

  • Related - Abe resignation's potential implications for USD/JPY nL1N2FU0B8



1m yen risk reversals Click here

USDJPY 1-week and 1-month implied volatility Click here

JPY=EBS Click here

Source:
Refinitiv IFR Research/Market Commentary

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