Yen Trading Volume Hits 2023 Record At Biggest Currency Exchange CME

(Bloomberg) -- Trading activity in the Japanese yen is at its busiest so far this year after comments by Bank of Japan Governor Kazuo Ueda triggered speculation of a near-term policy shift.

CME Group Inc., the world’s largest regulated foreign-exchange marketplace, traded $74.8 billion in the Japanese currency on Thursday, the highest volume for 2023. That included a total of $39.4 billion worth of futures contracts and $4.2 billion of options.

The yen jumped almost 4% in New York trading on Thursday following commentary from Ueda and one of his deputies which traders interpreted as a signal pointing toward the end of the bank’s negative rates regime. 

The sharp strengthening in the yen propelled the cost of dollar-yen options to their most expensive level since July, according to the CME. One-week volatility in the currency pair hit the highest level in over four months.

Read More: Two-Thirds of BOJ Watchers Expect End of Negative Rate by April

The yen has since pared its rally lightly after strong US labor market data saw markets price out rate cuts bets from the Federal Reserve next year. 

(Updates with volatility in the second-last paragraph. An earlier version of the story corrected spelling of CME Group Inc. in second paragraph.)

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