According to Jin10, yen traders have increased options-market activity ahead of key U.S. inflation data, using derivatives to improve trading flexibility amid a lack of consensus on the yen's future direction. USD/JPY one-week implied volatility rose for a second straight day on Wednesday after falling for five consecutive sessions, as traders positioned for the U.S. inflation report. The data is expected to affect the Federal Reserve's policy outlook and the dollar's direction. Volatility across longer-dated options also edged higher. In the short term, USD/JPY put options continued to trade above call options as investors sought protection against a sudden drop, while longer-dated investors kept buying call options to bet on a rebound in USD/JPY.