Volatility drops as BoJ intervention proves successful
But market may begin testing the Bank of Japan's resolve if more measures are not taken
Yen volatility dropped sharply as intervention by the Bank of Japan (BoJ) last Wednesday (September 15) proved successful, leaving the dollar/yen range-bound into the end of the week.
One-month options prices fell from highs of 12.38 on Tuesday to 10.75 by Friday, as the yen traded between 85.23 and 85.77 versus the dollar. On Wednesday, the BoJ broke a six-year hiatus from entering the currency markets, selling between ¥1.76 and ¥1.86 trillion into the market as the yen breached ¥83 – a 15-year
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