Will JPY call option writers be filling xmas stockings on FOMC?

By FXStreet FXStreet (Guatemala) – USD/JPY is currently trading on mixed sentiment as we start to count down the little trading time left ahead of the FOMC outcome today.

The Yen is another one of those currencies that can move like a rocket when it wants to and should there be volatility on an outcome beyond expectations, the scope to move beyond the recent ranges of late is wide in either direction. The price has been laid out in a bullish trend from 2014 Aug business on the basis of the divergence between the Fed and BoJ.

A confirmation that the Fed will act on their intent could propel the Yen south, but the velocity of such a move and how far the dollar could rally depending on whether, a) a rate hike has been fully priced in and 25bp’s seems to have been so. A bigger hike should certainly offer more demand for the dollar and b) Yellen’s rhetoric in the presser and the statement’s content. A dovish hike will not be a favourable outcome for the dollar bulls. If the Fed hold off, as many observers think that they should and explained here by analysts at TD Securities, …read more

Source:: FX Street