Dollar downed
A sharp spike in dollar/yen volatility, combined with overall greenback weakness, is causing acute problems for investors and hedgers alike. And fears about the state of the world's second-most traded currency pair are spreading. Kathleen Kearney reports
The appreciation of the yen under Yen100 against the dollar shook Asian foreign exchange markets in mid-March. Volatility in the currency pair rose to levels rarely seen in absolute terms, with any appreciation in the Japanese currency sparking a sharp rise in implied volatility.
Unlike the crises in currency markets in 1998 and 2003 when the yen spiked sharply and briefly - over a matter of just days - this latest move had been building for months. Turbulence in money markets hit highs in August
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