It has been a big week for Japan…………….off everyone’s radar screens until the PM resigns (whoever he was). Focus now on a weak Yen. New PM Kan wants to defeat deflation but also wants to raise the level of the consumption tax – apparently so but is not saying until he forms a new cabinet and fills key part posts (over Reuters).
Option players however are voting with their feet and piling into topside plays. Unfortunately they have a very bad track record and that’s why risk reversals are still skewed towards JPY calls though not nearly as much as last week.
