Japanese banks were peddling 88/98 DNTs a few weeks ago. We would not be surprised if they were doing that in response to interest from China in the same structure. Using that thesis, I’s imagine there will be some protective buying on the approach of 88.00 along with some heavy sales from market making banks trying to knock-out the structures so they can pocket the premium without any longer having any risk…
USD/JPY trades at 88.35, the lowest levels since the “flash crash” in early May. The low that day was 87.95.