The November US labour market report sent mixed messages. Payrolls growth was largely as expected, and close to the monthly average for 2016, at 178k.

However, the unemployment rate unexpectedly fell to 4.6%, the lowest since 2007, while earnings growth slipped to just 2.5% YoY.

The ADP estimate of December private sector employment growth was weaker than expected at 153k, down from 215k.

However, this is not always a reliable forecaster of the official data, in November, for example, it overestimated by about 60k. 

Spot ref: 115.991, USDJPY 1W risk reversals, IVs and IV skews are evidencing mounting hedging interests for downside risks (while articulating).

We wouldn't be surprised if it shows interim spikes, bears likely to drag again towards 113.169 and 111.450 levels sooner or later as the delta risk reversals favour bearish targets, hence in order to tackle these tricky swings we reckon debit put spreads are best suitable as the IVs  and premiums are reasonable considering daily swings on technical charts.

So, here goes the strategy, Debit Put Spread = Go long 2w ATM -0.49 delta Put + Short 1W (1%) OTM Put with lower Strike Price with net delta should be at around -0.40.

For a net debit bear put spread reduces the cost of trade by the premium collected (on the shorts of OTM put) and keeps option trader to participate in downward moves and any upswings in abrupt.