• USD/JPY tests 160.00, the prior intervention zone, with a notable increase in topside option demand

• The demand suggests the market isn't ruling out further gains above 160.00

• Topside strikes gain value as spot rises, so they will cover any short topside positions

• Biggest trade today: a 3-week 162.00 strike at 6.55 implied vol - dealers say $800 million traded

• Japan's Mimura says markets shouldn't forget intervention risks as the yen nears 160
USD/JPY DAILY CHART (EBS)

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