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JPY: Heavy Activity Across All Elements of JPY Market, Favouring Downside

JPY
  • No surprise to see heavy activity across all elements of the JPY market today, with intraday futures and options volumes well ahead of average for this time of day. Cumulative activity across CME JPY futures is close to double what you'd expect to see in the contract ahead of the NY crossover, as currency strength continues to pinch the outright net short position. 
  • Similarly, the busier JPY options markets has seen volumes supported by USD/JPY puts, positioning for potential further downside in the pair. USD/JPY put notional traded today is running at 25% ahead of call notional, with put strikes layered between Y155-156.00 a particular point of market focus. That said, there's also evidence of downside insurance further out of the money, with decent interest noted between 150.50 and 152.00. 
  • Spot USD/JPY has comfortably broken below the uptrendline drawn off the late December low, This confirms a resumption of the bear cycle off the Jul 3 high and exposes deeper support of 155.72 - the Jun 2 low and next key level. 
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