The Bank of Japan’s (BoJ) recent hawkish shift in monetary policy has resulted in a flurry of foreign exchange options trades, as the market looked for protection against downward moves in the dollar/yen spot rate.
The rate fell from 136.91 at close on December 19 to 132.331 the following day, after the announcement that the central bank would adjust its long-standing yield curve control measure – an indication that a rate rise might be on its way.
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Foreign exchange options dealers say
