USD/JPY vols trade at 10-year lows, with the curve suffering from continued spot paralysis and the impact from forthcoming holiday trading dates. The 1-wk has been undermined by Thanksgiving holidays in Japan and the US on Thursday, while 1-mth vols are beginning to capture the run up to the Christmas holidays. The 1-mth expiry falls on the last trading day before Christmas and is expected to see very thin volumes and as a result liquidity has suffered in this contract.
Thursday 21st December expiries in USD/JPY have held a bid on market maker quotes, with business expected to be healthy as players execute their last bit of business ahead of the year-end. Elsewhere, the 3-mth contract shows 6.40/6.55, 6-mth is at 6.75/6.90 and the 1-yr is steady at the 7.10/7.20 lows.
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