Yen Options Traders Flip Strategy Going Into BOJ Decision
- Clients are selling FX pair’s implied volatility, Nomura says
- Dollar-yen’s decline has stalled around support at its 50-DMA
This article is for subscribers only.
Traders in dollar-yen options are changing their strategy going into an expected Bank of Japan interest-rate increase Friday now that US President Donald Trump’s inauguration is over.
Before this week, investors’ bias had been to buy downside put options that gain in value if dollar-yen falls further, as expectations for a BOJ hike mounted. Now that’s almost fully priced in, they’ve turned their attention to a strategy that benefits if the currency pair trades in a tight range after the policy decision.