The risk of intervention facing the US dollar against the yen is rising. The options market shows an increase in market demand for protective tools against the rise of the yen, which indicates that the yen may rebound tactically rather than continue to strengthen. Any appreciation of the yen due to intervention is likely to be less sustainable than the July market, because the position environment that previously boosted the rise of the yen has basically returned to normal. The one-cycle risk reversal index was extended to about 235 basis points, biased against bullish options in yen, the highest premium in two weeks; the January volatility bias index rebounded from 200 basis points on September 11 to about 220 basis points. Although the implied volatility in the January period fell back to around 7% to 8%, and the price of options compared to the realized volatility reached the biggest discount since the beginning of August, these changes still indicate that the market's demand for Japanese yen upward hedging tools is increasing. This combination shows that investors are increasingly concerned about directional risk rather than widespread market turbulence.

The risk of intervention facing the US dollar against the yen is rising. The options market shows an increase in market demand for protective tools against the rise of the yen, which indicates that the yen may rebound tactically rather than continue to strengthen. Any appreciation of the yen due to intervention is likely to be less sustainable than the July market, because the position environment that previously boosted the rise of the yen has basically returned to normal. The one-cycle risk reversal index was extended to about 235 basis points, biased against bullish options in yen, the highest premium in two weeks; the January volatility bias index rebounded from 200 basis points on September 11 to about 220 basis points. Although the implied volatility in the January period fell back to around 7% to 8%, and the price of options compared to the realized volatility reached the biggest discount since the beginning of August, these changes still indicate that the market's demand for Japanese yen upward hedging tools is increasing. This combination shows that investors are increasingly concerned about directional risk rather than widespread market turbulence.