JPY: USD/JPY Dominates Options Volume, Short End RRs & Vol Shifting Sharply
Jan-26 02:09
Not surprisingly, USD/JPY volumes are dominating the FX options space so far today. Per DTCC we have seen just over $4bn in transactions, which is around 59% of total volumes in the major FX space. Such volumes are well ahead of what we normally see for volumes by this time of day. In terms of the larger tickets that have gone through, it has been a variety of puts and calls at varying strike rates. The 1 month USD/JPY risk reversal has fallen sharply, last beyond -2.00, which is fresh lows back to the first half of 2025. 1 month implied vol is above 11%. The overnight implied vol is near 22%. Moves at the back end of the curves are less dramatic.
- Futures volumes are more elevated in JYA, but still sub levels we saw in the US session on Friday.
- Spot USD/JPY is looking to to break under 100-day EMA support (around 154.25). We were last near 154.30.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Curves Twist Steeper, Quiet Return from Christmas Holiday
Dec-26 2025 20:17
- Treasuries look to finish mixed Friday, curves twisting steeper with 2s-10s holding modestly higher vs. weaker Bonds after the bell.
- Currently, the TYH6 contract trades +2.5 at 112-19 vs. 112-23 early session high, on light post Christmas holiday volume of just over 650,000. 10Y yld near steady at 4.1336%. Key short-term resistance into 112-31, the Dec 18 high.
- Projected rate cut pricing gained vs. late Wednesday levels (*): Jan'26 at -5bp (-3.3bp), Mar'26 at -15.2bp (-12.3bp), Apr'26 at -21bp (-18.1bp), Jun'26 at -35.2bp (-31.1bp).
- US$ index near midrange after bouncing off midmorning lows, Bbg index BBDXY +0.21 at 1200.86
- Mining shares continued to buoy the Materials sector after Gold climbing to new record highs early Friday (4,549.92), trading desks citing an uptick in geopolitical tensions after Pres Trump launched attacks on Isis elements in Nigeria.
- Look Ahead: Monday data sees Pending Home Sales MoM (1000ET), Dallas Fed Mfg Activity (1030). COMC minutes for the December meeting to be released at 1400ET Tuesday.
US STOCKS: Late Equities Roundup: Miners Outperform as Gold Hits Record High
Dec-26 2025 19:58
- Stocks hold near steady (SPX Eminis & Nasdaq) to weaker for the DJIA late Friday. Currently, the DJIA trades down 81.36 points (-0.17%) at 48652.31, S&P E-Mini Futures down 4.5 points (-0.06%) at 6978.5, Nasdaq up 16.4 points (0.1%) at 23629.91.
- Materials, Information Technology and Health Care sector shares led advances in late trade. Miners continued to buoy the Materials sector after Gold climbing to new record highs early Friday (4,549.92), trading desks citing an uptick in geopolitical tensions after Pres Trump launched attacks on Isis elements in Nigeria.
- Freeport-McMoRan +1.77%, Smurfit WestRock +1.14%, Newmont +0.78% and LyondellBasell Industries +0.72%.
- NVIDIA +1.88%, Crowdstrike Holdings +0.97%, Lam Research +0.94% and Dell Technologies +0.85%.
- Elevance Health +1.21%, Viatris +0.78%, UnitedHealth Group +0.71% and Baxter International +0.65%.
- Conversely, Energy sector and Utilities/Industrials shares led declines in the second half:
- Devon Energy -2.04%, APA Corp -1.64%, Diamondback Energy -1.23% and Occidental Petroleum -1.20%.
- Edison International -1.31%, Constellation Energy -1.29%, American Water Works -0.69% and Alliant Energy -0.61%.
- Huntington Ingalls Industries -1.18%, General Dynamics -1.08%, Axon Enterprise -1.07% and Northrop Grumman -1.06%.
US TSY OPTIONS: Apr'26 10Y Vol Sale
Dec-26 2025 19:26
- -4,500 TYJ6 112/113 strangles, 134
