• 1-week expiry USD/JPY option implied volatility hit 18-month low 6.1 Monday

• Implied volatility gauges realised volatility risk, determines premium

• Surprising, given Mid East tension and haven risk premium evident elsewhere

• 1-week implied now equal to realised volatility from the previous week

• Means similar FX performance to previous week will cover option premium

• Potential therefore for a cheap, risk off hedge if Israel conflict spreads

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