The yen slumped on Wednesday to levels that saw Japan intervene in the currency market last year. However in the options market, traders see little need to prepare for a jolt from authorities in Tokyo.
(Bloomberg) — The yen slumped on Wednesday to levels that saw Japan intervene in the currency market last year. However in the options market, traders see little need to prepare for a jolt from authorities in Tokyo.
One-week implied volatility in dollar-yen, a gauge of expected movement in the currency pair over the period, slipped to 8.13%, near the lowest level this year.
That signals option traders see little chance of intervention even as the yen reached as weak as 145.93 per dollar in New York trading, around the level that saw authorities wade in last September — or that they hold the view that Japan entering the market wouldn’t be too disruptive.
While Finance Minister Shunichi Suzuki said Tuesday that he’s watching market trends with a “sense of urgency,” traders and government officials appear to see the speed of movements as more important triggers than specific levels.
–With assistance from Anya Andrianova and George Lei.
(Updates with market moves.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.