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
Ex-governor says Fed should use Treasury derivatives in crisis
Doing so could split response from monetary policy and hedge interest rate risks, argues Jeremy Stein
Unlocking global market access and redefining trading infrastructure
Designed to reimagine market connectivity, GAN offers strategic significance for financial institutions, regulators and exchanges
CLO market dismisses First Brands contagion worries
But investors say larger concerns remain for the product’s riskiest tranches
Pimco piled into euro put options in Q2
Counterparty Radar: EUR/USD buying spree takes Pimco’s FX options book to $7 billion
European exporters add flexibility to FX hedges
Corporates with USD exposures have been reducing hedging tenors and adding optionality
China margin negotiations wait on new collateral document
With 2026 deadline looming, banks await key Nafmii document to begin contract negotiations
Crypto ETFs gatecrash the US Treasury repo market
Counterparty Radar: Volatility Shares tapped $13 billion in repo funding in Q2
Korean autocalls to make comeback, with ‘smaller pie’ for banks
As equity-linked autocallable channels look set to reopen, new rules could limit market’s revival
