TOMORROW COULD GET WILD FOR MARKETS
Two major events are landing at the same time
BOJ rate decision
A hike is already heavily expected but the real volatility may come from the BOJ’s guidance
If the BOJ signals faster or more aggressive tightening
USD/JPY could drop hard and the yen carry trade unwind risk could rise
Then comes triple witching
Around $6.2T in options are set to expire
If markets remain weak going into the expiry
forced positioning and hedging flows could amplify the moves
One day
Two catalysts
Potentially extreme volatility
Buckle up
Two major events are landing at the same time
BOJ rate decision
A hike is already heavily expected but the real volatility may come from the BOJ’s guidance
If the BOJ signals faster or more aggressive tightening
USD/JPY could drop hard and the yen carry trade unwind risk could rise
Then comes triple witching
Around $6.2T in options are set to expire
If markets remain weak going into the expiry
forced positioning and hedging flows could amplify the moves
One day
Two catalysts
Potentially extreme volatility
Buckle up

