JPY: USD/JPY Edging Higher Of BoJ, Longer Dated Implied Vols Tracking Lower
Jan-24 02:00
USD/JPY is drifting higher as the BoJ announcement approaches. We were last 156.30/35, off a little over 0.15% in yen terms. Yesterday's highs were at 156.75, which could serve as an upside target. The earlier slightly stronger than expected headline inflation hasn't shifted sentiment. As we noted, core measures were close to recent outcomes and inflation pressures were fairly narrowly based.
- Overnight implied vols are off highs, last around 11.6%. At end Thursday we were at 17.63%, which was still below previous BoJ meeting outcomes from 2024.
- Implied ranges for the next 24 hours sit at 154.33-157.71, with an implied probability of just under 74%.
1 month implied vols are back to levels last seen in July, close to 9.285%. Longer dated vols have also fallen sharply over recent sessions.
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