The USD/JPY is likely to stay in its recent range around the lower half of the 82s, Citibank Japan chief FX strategist Osamu Takashima says in a note. Still, in the options market, rises in volatilities and risk reversals favoring JPY-put options are becoming evident particularly in medium-term horizons such as six months, he adds. "(Markets) may have resumed factoring in the scenario of yen weakening in the mid term." Volatilities implied by six-month, at-the-money USD/JPY options are at 9.00%/9.25%; six-month 25 delta risk-reversals favor USD-call/JPY-put options by 0.75%/1.00%. The USD/JPY is last at 82.45.
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