USD/JPY vols edge lower in the front end of the curve, with the 1-mth indicating 6.45/6.75 vs 6.60/6.90 in the European. The negative dollar reaction to the US data has not changed vol sentiment, with spot still in familiar territory. Currently spot sits in the middle of the weekly range, where the market is heavily congestion with strikes.
Expiries are noted between 117.00 and 117.45 today and a number strikes changed hands between 117.60 and 118.00 for next week's trade. As a result of this interest vols are expected to drift lower unless spot can revert to levels below the 117.00 handle. Risk reversals remain stable, with the 1-mth still indicating a modest skew for JPY calls over at 0.60/0.90.
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