Why the consensus is wrong on USD/JPY
For almost three years, the consensus among foreign exchange forecasters has consistently been that USD/JPY is headed higher. Despite the opposite holding for almost all of that period, the consensus view remains heavily skewed toward yen weakness and expectations embedded in options prices are, unusually, beginning to agree with analysts.
Risk reversals show a historically unusual skew for USD/JPY calls, with shorter dates being outright bid for US dollar calls and even longer-dated puts at an
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