Tokyo: Once known for its safe-haven characteristics of appreciating fast and depreciating slowly, the yen is being treated in a diametrically opposite fashion by an options market that is pricing in faster falls than gains in the Japanese currency.
As the yen buckles under the Bank of Japan’s massive money printing, just about every market player expects a weaker yen but the pricing in options suggests the fall could be even faster than anticipated.
“Historically the yen has been a safe-haven currency, but I think the times have changed,” said a trader at a Japanese bank.
Safe-haven asset prices tend to jump during times of crisis or acute uncertainty, and decline more gradually once the source of tension gives way to greater optimism More >>
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