(Bloomberg) Options traders are preparing for turbulent yen trading. Most Read from BloombergBiden Vows Aid for Gaza, Backs Israel Over Hospital BlastHospital Blast Kills Hundreds as Israel, Hamas Trade BlameQQQ Advances in Late Trading as Tesla Rebounds: Markets WrapTesla’s Runaway Growth Faces Reality Check in Turbulent EconomyUPenn Donors Pile Pressure on School as David Magerman Pulls SupportFluctuations are likely to increase amid growing concerns the Japanese authorities will intervene
(Bloomberg) The yen may have slumped to within a whisker of levels that saw Japan intervene in the currency market last year, but options traders see little need to prepare for a jolt from authorities in Tokyo.Most Read from BloombergRussia Calls Emergency Key Rate Meeting as Ruble PlungesHollywood Studios Offer Writers a New Deal With Push From Netflix, Iger to End StrikeRussia’s Emergency Rate Hike Fails to Lift Ruble After CrashS&P 500 Drops Below Key Level in Late-Day Slide: Markets WrapT
The USD/CAD was already on a downward trajectory following last week's big reversal, as the US dollar was sold against most currencies amid a risk-on trading environment. It came under renewed pressure as the week got underway. This time, it was oil prices providing the Canadian dollar fresh impetus after they jumped some 8% at the Asian open following the weekend news from OPEC+ deciding to cut oil output sharply.
We think there is a good chance the USD/JPY could resume trending lower again. As the market grows even more confident about the major central banks pausing their rate hiking and possibly even start cutting interest rates in the not-too-distant future, this should keep a ceiling on bond yields and therefore the USD/JPY.