• Long gamma positioning could turn short if and when 161.00 barriers/triggers are taken out - dealers warn

• Long gamma is suppressing option implied volatility and helping to restrict actual/realised volatility

• A shift to short gamma would see those with exposure needing to buy spot and volatility would typically increase

• Recent sessions have seen increased demand for option strikes above 161.00 and even 162.00

• They would benefit from a topside breakout and increased volatility - realised and implied

• Demand for such options would suggest traders are hedging for a higher BoJ intervention threshold

• USD/JPY upside remains hard fought, but BoJ and Fed policy meetings add another layer of risk next week
JPY=EBS


(Richard Pace is a Reuters market analyst. The views expressed are his own)