The Dollar-Yen pair rose to 113.26 on Wednesday and currently remains bid above 113.00. The options market is not buying the near 90 degree rally in the USD/JPY pair.
Risk reversals drop
The one-month 25-delta risk reversals fell to -1.6 yesterday; the lowest level since September 8. The decline in the risk reversals indicates that investors are hedging against long spot positions, i.e. demand for the put options is on the rise.
US-Japan 10-yr yield spread
The rally in the pair is backed by the US-Japan 10-year spread, which currently stand at 27 basis points [bps]; the highest level since July 10 high.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.