Business & Finance
Traders Brace for Yen Swings as Holiday Intervention Risk Looms
Key Points
Currencies Traders Brace for Yen Swings as Holiday Intervention Risk Looms Options traders are paying up to hedge against sharp moves in the yen ahead of thin US holiday trading, as speculation grows that Japanese authorities may be less predictable in how they intervene to support the currency. One-week dollar-yen risk reversals have become more negative, signaling greater demand for yen call options relative to dollar calls. At the same time, one-week butterfly spreads have widened,...
Currencies
Traders Brace for Yen Swings as Holiday Intervention Risk Looms
Options traders are paying up to hedge against sharp moves in the yen ahead of thin US holiday trading, as speculation grows that Japanese authorities may be less predictable in how they intervene to support the currency.
One-week dollar-yen risk reversals have become more negative, signaling greater demand for yen call options relative to dollar calls. At the same time, one-week butterfly spreads have widened, suggesting investors are paying more for protection against outsized moves in either direction.