US 10-year Treasuries have fallen in yield this afternoon, from near 2.50% early in the day to around 2.37% as stock losses accelerated. Bank stocks are the main focus today as big banks continue to suffer capital woes.
USD/JPY is trading in the 89.90 area, weighed down by risk aversion but supported by large 90.00 options that expire at 10 am NY time tomorrow. As options get close to expiry, they become an “all or nothing” proposition. Lots of hedging has to be done as positions move in and out of the money. That tends to create a magnetic effect on prices around big strikes, keeping them from moving too far in either direction.