USD/JPY risk reversals retreat from 6-month high, Vols rise

Omkar Godbole FXStreet Contributor

The USD/JPY one-month 25 delta risk reversals fell from the 6-month high of -0.70 to -0.80 yesterday, while the one-month at the money option volatility ticked higher to 7.09 from 6.948.

The drop from -0.70 to -0.80 indicates weakening bias for the bullish bets (call options).

Risk reversals and Vols

The drop in the risk reversals could be an indication that investors are finally giving up on the hope of a bullish break in the USD/JPY pair above 114.18 levels.
The vols may have ticked higher, but still remains at 2-1/2 year low.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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