Now that USD/JPY has glided through the 155 level, markets are now on high alert for Japanese FX intervention. Recall that 155 had been the level that many in the Japanese banking community had felt would elicit BoJ FX selling operations. That heightened sense of intervention is reflected in the FX options market, where one week USD/JPY traded volatility is now priced at 14.5%, the highest since last December and the one week risk reversal skew - the price for a USD/JPY put over an equivalent USD/JPY call option - has now widened to 3.4% in favour of USD/JPY puts. These are the widest levels since last July. Japan ... (full story)