The yen may have slumped to within a whisker of levels that saw Japan intervene in the currency market last year, but options traders see little need to prepare for a jolt from authorities in Tokyo.
One-week implied volatility in dollar-yen, a gauge of expected movement in the currency pair over the period, is drifting slightly higher but remains close to the lowest level this year.
That signals option traders see little likelihood of intervention even if the yen weakens to ¥145.90 — which saw authorities wade in last September — or the view that Japan entering the market wouldn’t be too disruptive. It traded at ¥145.60 at 7:43 a.m. in Tokyo on Wednesday.