Traders Brace for Yen Swings as Holiday Intervention Risk Looms

FX options are being bid up to hedge sharp yen moves as US markets face thin holiday liquidity and speculation increases that Japanese authorities may intervene less predictably. The increased demand for protection suggests rising near-term volatility risk for USD/JPY into the low-liquidity window.

Analysis

FX options are being bid up to hedge sharp yen moves as US markets face thin holiday liquidity and speculation increases that Japanese authorities may intervene less predictably. The increased demand for protection suggests rising near-term volatility risk for USD/JPY into the low-liquidity window.