Japanese Yen Weakens Against U.S. Dollar

The Japanese yen hit a near-38 year low against the U.S. dollar, raising expectations of intervention in currency markets. Japan's Ministry of Finance confirmed intervention in May, spending $62.25 billion. Analysts speculate on potential future intervention due to continued weakening of the yen.

Treasury Options Trading and Federal Reserve Policy

Treasury options traders are preparing for various scenarios, including interest rate cuts or hikes by the US Federal Reserve. Recent inflation data has led to uncertainty about the Fed's monetary policy. Currency markets are also watching the Bank of Japan. Traders are positioning for both dovish and hawkish outcomes in rates. Tactical positioning in Treasuries has been short, with open interest increasing as yields rise.