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Rebounds From Sub 154.00 Dip, Option Markets Remain Away From 2024 Extremes, BoJ Next Week

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USD/JPY sits near 154.20 region, above earlier lows of 153.96. We are around 0.15% stronger in yen terms versus end Wednesday levels in NY. Lows in the pair came around the time of comments from currency chief Kanda that G7 members stated excessive currency moves are harmful for economies. He added this reflects Japan's stance on FX (BBG). This keeps the intervention threat still a focus point for markets.

  • Option markets sit away from 2024 extremes. USD/JPY overnight vols are elevated but sub recent highs in the 15-20% region (last close to 12%). It's more benign in the 1 week implied space, last at 8.32%. It's a similar story in the risk reversal space, 1 week at -1.84, 1 month -1.575, both up from 2024 lows.
  • The push lower in US yields is another yen positive at the margin today, although 10yr TSY futures have broken above Wednesday highs at this stage.
  • Broader USD sentiment is softer as well, the BBDXY last near 1260, off a little over 0.1%.
  • Looking ahead we have March national CPI on print tomorrow. Next Friday we have the April BoJ decision.
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USD/JPY sits near 154.20 region, above earlier lows of 153.96. We are around 0.15% stronger in yen terms versus end Wednesday levels in NY. Lows in the pair came around the time of comments from currency chief Kanda that G7 members stated excessive currency moves are harmful for economies. He added this reflects Japan's stance on FX (BBG). This keeps the intervention threat still a focus point for markets.

  • Option markets sit away from 2024 extremes. USD/JPY overnight vols are elevated but sub recent highs in the 15-20% region (last close to 12%). It's more benign in the 1 week implied space, last at 8.32%. It's a similar story in the risk reversal space, 1 week at -1.84, 1 month -1.575, both up from 2024 lows.
  • The push lower in US yields is another yen positive at the margin today, although 10yr TSY futures have broken above Wednesday highs at this stage.
  • Broader USD sentiment is softer as well, the BBDXY last near 1260, off a little over 0.1%.
  • Looking ahead we have March national CPI on print tomorrow. Next Friday we have the April BoJ decision.