The USD/JPY curve has flattened out amid a range bound spot tone. The flatter profile came after further selling in the short end and the front end of the curve. 1-wk vols indicate 7.00/7.75 and the 1-mth indicates 7.05/7.35. 3-mth vols sit at 7.00/7.25, 6-mth is at 6.95/7.20 and the 1-yr is at 7.00/7.20.
A 2nd March 119.00 vs April 9th 117.80 traded at 0.30% in favour of the near-dates and June 7th 114.20 dealt at 8.25%. A 3-mth risk reversal dealt in favour of JPY calls at 1.40% in USD 250 million a leg and long dated interest was also seen. 1-yr 25-d dealt at 1.05% and 18-mth 115.00 JPY puts with a Knock In at 115.00 went through at 0.845% in USD 500 million.
The Asian session also saw 1-yr 15-d reversals trade at 1.7% for JPY calls over and 18th October 120.00 JPY call with a Knock Out at 105.00 traded at 2.035% in USD 100 million. The pick up in downside interest has not had a great deal of effect on the strip. 1-wk reversals show 0.35/1.10, 1-mth is at 0.65/0.95 and the 3-mth shows 0.75/1.05. 6-mth and 1-yr 25-d show 0.95/1.20 respectively.
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