March 15, 2023 11:41 GMT
EUR/JPY Risk Reversals Look Shaky Pre-ECB
- Currency moves persist into the NY crossover, with EUR/JPY hitting a fresh session low at 141.49, only finding support at the Monday low of 141.37.
- In options space, the xxx/JPY risk reversals curve took a step higher, markets factored out the near-term risks of a YCC policy switch after Friday's BoJ meeting, but much of that move is now being reversed.
- One-week expiry RR is returning toward Monday lows, but has someway to go to hit last week's lowest levels, where risk reversals traded near 4.5 points in favour of EUR/JPY puts. A dovish turnout from the ECB this week (or even just the expectations of one), could see this contract come under further pressure.