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2026-09-19 02:44:09
Traders' bullish sentiment towards the yen has slightly improved, triggered by recent news that the Bank of Japan is conducting a survey of exchange rate conditions. However, compared to the market reactions at the end of July when Tokyo intervened in the foreign exchange market, and in early September when US Treasury Secretary Bessenter publicly urged the Bank of Japan to raise interest rates, market expectations for yen appreciation are now much more subdued. The USD/JPY 1-week risk reversal indicator has fallen twice in three trading days, further into negative territory: it recorded -2.17% on Friday, -2.02% on Thursday, and -1.98% a week ago, indicating relatively higher market demand for put options. In recent months, traders have generally maintained a bullish stance on the yen, with put options betting on a decline in USD/JPY over the next week being quoted higher than call options betting on an increase in the currency pair. However, current market expectations for yen appreciation over the next week are much more moderate compared to the extreme levels seen in early September and late July to early August.
