Dollar/yen move sparks options buying

Foreign exchange

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Heavy volatility in the dollar/yen spot rate in the past two months has sparked a flurry of activity in the options market, as market participants have rushed to cover short dollar/yen positions and unwind directional plays. The yen surged to a four-year high, reaching ¥103.70 against the dollar on April 1, before retracing and breaking through ¥114 on May 10, the first time it has breached this level in eight months.

The volatility of the dollar/yen spot rate has taken many participants by