Traders say there is a growing felling in the market that despite strong-yen rhetoric from the DPJ during the campaign, Japan will not allow the USD to fall below the 87.10 lows established in December and January.

Helping strengthen that view were comments from Japan’s MOF (ministry of finance) that

Options activity is being tracked to gauge the market’s growing confidence.

Interestingly, there is talk of a 91.00 barrier option above the market already. Typically, barriers are used to “cheapen” a vanilla strategy. For instance, if you are very bearish and wanted to buy a 90.00 USD put, that would be very expensive. If you attached a 91.00 knock-out to that structure, it would be dramatically cheaper, as there are high odds of the 90.00 put being extinguished by a minor bounce above 91.00 first…