OPTIONS: USD/JPY Option Volumes Surge, Strikes 160 & Above In Focus
USD/JPY option volumes have dominated Thursday Asia Pac trade, per DTCC. At this stage we have seen around $7bn of trades go through, which is around 57% of total options volumes per DTCC. This is well up on typical volumes seen by this part of the day (usually closer to $2.5bn or so). In terms of some of the larger volume transactions, we have seen a 170 strike call go through for expiry Feb 23 next year. There have also been numerous calls go through with 160 or higher strikes for January of next year. In terms of USD/JPY implied vols, we are looking to break higher, the 1 month was last near 10.475%, close to fresh highs since July. Previous intervention periods in 2022 and 2024 saw higher levels of implied vol, with peaks in and around the 16% region for the 1 month.
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 21-Oct | 0800 | EU | ECB Lane at Macroeconomics & Finance Conference |
| 21-Oct | 1000 | EU | Government Debt / Government Deficit |
| 21-Oct | 1200 | EU | ECB Lagarde Keynote at Norges Bank Climate Conference |
| 22-Oct | 1200 | EU | ECB de Guindos at Barcelona Real Assets Meeting |
| 22-Oct | 1325 | EU | ECB Lagarde at Frankfurt Finance & Future Summit |
| 23-Oct | 0745 | FR | Manufacturing Sentiment |
| 23-Oct | --- | EU | ECB Lagarde at Euro Summit in Brussels |
| 23-Oct | 1430 | EU | ECB Lane Award Acceptance Speech |
| 23-Oct | 1500 | EU | Consumer Confidence Indicator (p) |
| 24-Oct | 0745 | FR | Consumer Sentiment |
| 24-Oct | 0800 | ES | PPI |
| 24-Oct | 0815 | FR | S&P Global Manufacturing / Services PMI (p) |
| 24-Oct | 0830 | DE | S&P Global Manufacturing / Services PMI (p) |
| 24-Oct | 0900 | EU | S&P PMIs (p) / ECB Cipollone on International Finance |
| 24-Oct | 1400 | BE | BNB Business Confidence |
| 27-Oct | 0900 | EU | ECB Consumer Expectations Survey / M3 |
| 27-Oct | 0900 | DE | IFO Business Climate Index |
| 27-Oct | 0915 | EU | ECB Elderson Keynote on Banking Governance |
FOREX: USD Index Drifts Up, USD/JPY Higher As Takaichi Confirmed As PM
USD/JPY is testing higher as Japan's parliament confirmed that Takaichi will be the next PM. We sit around 151..35/40 in latest dealings, with dips back to 151.00 supported. The result will not have been a surprise to the market, as her election holds since last Friday were close to 100, per Polymarket. Focus will now shift to the policy outlook (with cost of living/fiscal outlook, along with BoJ the early focus points). Earlier, we had headlines that Satsuki Katayama will be appointed as the new FinMin in Japan, who argued in any interview earlier this year the yen was undervalued. This only provided a modest bounce in yen. Other Japan officials have also stated there is no desire to excessively weaken the yen. This, along with intervention risks, may help cap the upside in the pair (outside of broader USD/yield moves). More meaningful resistance is likely in the 152/153 region, while the bull trigger is at 153.27. On the downside, the 50-day EMA is back near 149.00.
- The USD is drifting higher elsewhere as well, although aggregate moves are modest at this stage, with mixed crossed asset trends. The equity backdrop remains supportive, with US equity futures ticking up, while regional Asia Pac markets post strong gains led by the tech side. US Tsy yields are little changed, with the 10yr still under 4.00%. Gold is lower, consistent with some USD support.
- The BBDXY index is back up to around 1210.7 (+0.15% for the session so far), but this is familiar ranges for Oct (earlier highs were just above 1219, while we started the month sub 1200).
- NZD/USD is lower, but at 0.5725/30, remains within recent ranges, while AUD/USD has softened but remains near 0.6500 at this stage. AUD/JPY is edging back towards recent highs, last 98.30/35, aiming for an upside 98.50 test. NZD/JPY is near 86.60, just under the 20-day EMA resistance point and now little changed for the session.
- Later US October Philly Fed non-manufacturing and September Canadian CPI print. ECB President Lagarde and Board member Lane speak.
GBPUSD TECHS: Monitoring Resistance Around The 50-Day EMA
- RES 4: 1.3613 76.4% retracement of the Sep 17 - Oct 14 bear leg
- RES 3: 1.3544 61.8% retracement of the Sep 17 - Oct 14 bear leg
- RES 2: 1.3527 High Oct 1 and a pivot level
- RES 1: 1.3487 50.0% retracement of the Sep 17 - Oct 14 bear leg
- PRICE: 1.3391 @ 06:14 BST Oct 21
- SUP 1: 1.3317/3249 Low Oct 15 / 14 and the bear trigger
- SUP 2: 1.3220 0.764 proj of the Sep 17 - 25 - Oct 1 price swing
- SUP 3: 1.3142 Low Aug 1 and a key support
- SUP 4: 1.3041 Low Apr 14
Recent gains in GBPUSD appear corrective - for now. However, price has recently pierced resistance around the 50-day EMA, currently at 1.3448. A clear break of this average would highlight a stronger reversal and expose resistance at 1.3527, the Oct 1 high and a pivot level. Clearance of this hurdle would be bullish. On the downside, key support and the bear trigger is 1.3249, the Oct 14 low.
