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Forex pairs in this Article » USD/JPY
FXstreet.com (Barcelona) - "Speculator positioning, as measured by IMM contracts, suggests that the market has got itself long USDJPY into the election - providing plenty of fuel to drive the pair lower as these positions are unwound." writes the Asia-Pacific Strategy Team at RBS.

The USDJPY implied vols remain cheap, despite the event risk - "We suggest buying a 1m 78.50 USDJPY European Digital. We expect that if the USDJPY does indeed fall, then implied vol will fall once again as the pair is squeezed between sellers on the topside and the BoJ on the downside. Alternatively, a simple 1m vanilla USDJPY 79 put costs 34bp and provides an approximate 4:1 payout on a move to 78.00." the team notes.
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