Please be noted that the yen currency crosses flash the highest IVs among G20 space (seems quite exaggerated OTC moves), while USDJPY sizeable market pin risks at 105.50 for tomorrow’s expiries and higher skews for OTM put strikes, same is the case with EURJPY and GBPJPY.
The Japanese trade balance numbers have beaten the market forecasts by producing the improved numbers on MoM basis, a jump from 0.29T to the current 0.33T over the previous period.
This week's key data focus would be on BoJ and US Fed monetary policies along with US consumer confidence advance GDP and consumer durable goods order, while CPI for Japan side.
USDJPY ATM premiums seem to the under-priced as the IVs are spiking in sky rocketed pace above 25%. As you can probably guess the disparity between IVs and option pricing, ATM option are priced in just shy above 7% whereas the IVs are above 25% for 1-week expiry.
For today, Yen lost against dollar about 0.15% as the pair was unable to hold onto day highs at 106.721, currently trading at 106.178 levels.
USDJPY’s price direction is majorly dependant on Fed’s fund rates, we do not expect a hawkish FOMC statement; the central bank officials are likely to wait until the August Jackson Hole meetings for more decisive signals about a September hike.
On the flip side, the BoJ announcing “helicopter money” is unlikely, in our opinion. Instead, we expect it to cut IOER further and increase ETF/JREIT purchases at next week’s meeting.


Bank of Japan Eyes Further Rate Hikes Amid Middle East Tensions and Inflation Pressures
Global Markets React to Strong U.S. Jobs Data and Rising Yields
Moldova Criticizes Russia Amid Transdniestria Energy Crisis
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data
Uranium Bull Market Gains Momentum Amid Supply Deficits and Geopolitical Tensions
RBI Holds Interest Rates Steady Amid Middle East Tensions and Global Uncertainty
China's Refining Industry Faces Major Shakeup Amid Challenges
Stock Futures Dip as Investors Await Key Payrolls Data
India's Central Bank Holds Rates Amid Iran War Energy Shock
Paraguay Holds Interest Rate at 5.5% as Inflation Remains Stable Amid Global Uncertainty
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed
RBNZ Holds Rates at 2.25% as Middle East Conflict Fuels Inflation Concerns
Citigroup Delays Fed Rate Cut Forecast Amid Strong Jobs Data and Inflation Concerns




