Hedge funds added to bullish options wagers on the Japanese yen Tuesday following news that Bank of Japan officials were open to the idea of raising interest rates again this year, despite the political instability.
The “BOJ headline puts rate hikes back on the table and has spurred renewed interest from hedge funds for a stronger yen” by buying put options on other currencies, including the dollar against the yen, said Sagar Sambrani, a senior foreign-exchange options trader at Nomura International Plc in London.