The yen breaks 160, triggering intervention alerts; hedge funds are using options to establish short positions.

The Japanese yen fell to its lowest level since July 2024, prompting Japan’s top foreign-exchange official, Jun Muramura, to warn that if the current situation continues, authorities may take decisive action in the foreign-exchange market. Before that, Finance Minister Akiyoshi Katayama had made similar comments on March 27, when the exchange rate closed above 160. According to data from the CME Group’s options central limit order book, on Monday the trading volume of the most active May put options was more than three times that of the most active call options. Mukund Daga, global FX options head at Barclays in London, said: “Hedge funds show some interest in USD/JPY options, as a way to position themselves using hedges against potential positions that could lead to a sharp drop in the exchange rate following possible intervention.” He noted that trading activity is concentrated in short-term structures: “This indicates that the market is focused on near-term event risk rather than a broad directional shift.”