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SocGen Recommend A Couple Of USD/JPY Put Expressions, Eying Potential BoJ Moves


Societe Generale write “we are a lot closer to the end of the Fed tightening cycle than we were six months ago and waiting for the next step towards BoJ policy normalisation.”

  • “USD/JPY Y150 is a major psychological barrier and the BoJ/MoF have played on that, but unless they back up their words with action, a break will see the barrier’s lack of substance exposed unless the BoJ has changed its YCC policy by then.”
  • “Our economists expect the BoJ next hawkish tweak to come in January 2024.”
  • “With spot peaking and implied vol. at the bottom, we see a lot of value in buying USD/JPY puts.”
  • “We recommend the 4-month tenor to capture the 22-23 January BoJ meeting.”
  • They recommend two trades as a result, buying the 4-month USD/JPY 141.50/140.00 put spread and buying the 4-month USD/JPY 142.00 put, with a knock-out at Y135.00
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