Premiums to hedge against swings in the dollar-yen exchange rate have surged the most in three months as the market starts to price in June meetings by the Federal Reserve and the Bank of Japan. One-month implied volatility on the pair climbed 206 basis points today, the most since Feb. 11, to 12.13 percent. Though the market sees a near-zero chance of a Fed rate increase in June, Federal Reserve Bank of New York President William Dudley said on Friday that it is reasonable to expect that policy makers will raise the benchmark rate twice this year.

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