Hedge funds switch yen bets after Japan election shock
Takaichi victory forces unwinds and a move to topside trades, while barriers give dealers a headache
The surprise outcome of the Japanese election has led to a U-turn among many macro hedge funds that are now positioning for a weaker yen through exotics options structures, which has left dealers scrambling to manage exposures from barrier trades.
Going into the contest for Japan’s new prime minister, one of the last consensus positions in the foreign exchange volatility space was for a bullish
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Markets
All that glisters: precious metal volumes surge on FX venues
Gold and silver liquidity on foreign exchange trading platforms improves as more dealers link precious metals with e-FX
MAS official flags risks in Asia’s path to T+1 settlement
Regulator says region faces “unique challenges” in establishing a shorter settlement cycle
How window-dressing distorts US repo markets
Banks crush their repo balances periodically to massage systemic indicators, with far-reaching consequences for borrowing rates
CME futures outage caused FX spot pricing problems
At least one non-bank was forced to pull prices, and NDFs also affected
Credit default swaps break through fourth wall
Fourth-trigger CDS trading ramps up as more protection sellers enter field
Growth in China snowball lookalikes sparks questions
New products include tweaks to sidestep restrictions, but some believe they don’t go far enough
Traders prepare for EU energy rules despite political risk
Exporter pressure on LNG supplies is threatening Europe’s regulatory push, leaving markets uncertain
Hedge funds cut BoJ bets after torrid year in yen rates
Dealers see lighter positioning after shock October election saw more than $300m of losses, compounding April’s pain
