BUZZ-COMMENT-Market worried pressure will mount on USD/JPY
Feb 5 (Reuters) - The U.S. dollar has suffered against the Japanese yen, this week, and the market seems to be worried that things could get even worse.
USD/JPY has come under pressure from strong Japanese wage data and comments from a BOJ official hinting at further rate hikes boosted Japan's currency.
Risk reversals highlight a currency pair's most vulnerable direction, as they charge a premium for option strikes in that direction versus the other. Currently the premium for 3-month downside versus topside expiries are at 2-month highs, meaning option market expectations are for further USD/JPY declines.
USD/JPY has slumped from 154.45 to 152.55 on Wednesday, according to EBS data, breaking well below the thick daily cloud, that spans the 153.37-155.20 region. Fourteen-day momentum remains negative, highlighting the downside risk.
If USD/JPY registers a daily close under the cloud base, that would be a bearish sign.
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