FX options activity running well at the.....>

OPTIONS: FX options activity running well at the NY crossover, with demand for

USD/JPY, USD/KRW and EUR/JPY options helping prop up volumes which sit above

average for this time of day.

- A minor bounce in the greenback has unsettled some of the major pairs in DMFX,

in turn supporting front-end implied vols. The moves are most notable in AUD,

with 1m vols adding over a point to hit one-month highs at 13.4 vols - the

highest since early May.

- The realised USD/JPY vol chart looks to have bottomed, with the breakout in

JPY spot over the past few days clearly a supportive factor. No surprise then to

see a renewed in interest in JPY options against both USD and EUR today. Despite

the strength in JPY spot, however, USD/JPY upside exposure has drawn more focus,

with $4 in calls trading for every $3 in puts across Asia/EU hours. Call option

activity has revolved around 107.50 and 110.00-50 strikes, which may suggest

markets still see a decent risk of USD/JPY resuming its upward trend.

- Today's 10am NY cut looks pretty uneventful with the only notable expiries in

EUR/USD at$1.1200-10(E532mln) and $1.1300(E802mln).