Yen Traders Use Options for ‘Flexibility’ Into US Inflation Data

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world Yen traders are ramping up options market activity ahead of key US inflation data, turning to derivatives for flexibility amid a lack of consensus on the currency’s direction. Dollar-yen’s one-week option implied volatility, a measure of expected price swings that directly drives up the cost of options contracts, rose for a second straight day on Wednesday, after falling in the previous five sessions. That’s because traders are positioning for Wednesday’s US inflation report, which is expected to shape the Federal Reserve’s monetary policy outlook and the greenback’s trajectory. Volatility in longer-term tenors also ticked higher.

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