Is someone predicting a Halloween horror show for the BOJ next week?

Just an early heads up

It’s Whopper Wednesday next week in the USDJPY options, with a growing expiry at 111.60. It’s 3.88bn currently.

Myself and Kman have had some discussion about what it might be (BOJ hedging, M&A hedging, technical related, EoM related etc etc). The consensus we came to is that neither of us have a clue about the real reason. It’s a strange number to have such a large interest though, which does enforce the theory that it’s something particular rather than just the BOJ meeting.

But anyway, it’s there, it’s grown from 3.26bn on Tuesday, and could grow further and be additionally hedged out in the spot market, or by other options activity. 3.85bn of it are puts.

If you’d like more information on the options market and the expiries, read our post ‘An explanation of Forex options and their impact on currency markets’.