Win-Win Yen Scenario Looks Fragile At Best

By Vassilis Karamanis, Bloomberg Markets Live reporter and strategist

Bullish yen options bets are in high demand this week, but the narrative behind the move could easily crumble.

In the spot market, we’re seeing a correction of the dollar’s ascent since mid-September, with the Japanese currency up by around 1.5% from recent lows. A large part of the move can be attributed to positioning into the US election and its immediate aftermath. But the options positioning is more about geopolitical risks and the Bank of Japan, which are seemingly creating a win-win scenario for traders.