Options traders continue to hold a bullish outlook on the yen's long-term prospects, unaffected by short-term fluctuations in the spot market. The yen gave back some of this week's gains on Thursday, posting its steepest decline in nearly three weeks; during the London morning session, the dollar-yen pair slipped again, down 0.2% to 154.05.

The one-year risk reversal indicator remained steady despite spot short-term volatility, with the premium for yen calls widening to 54 basis points on Friday, marking the highest closing level since February. Earlier this month, that metric was just 10 basis points.

Driven by gains in the yen's spot price, the short-end of the currency pair's volatility skew has eased compared to a week ago. Meanwhile, demand for options with longer-dated tenors has risen, reflecting a shift in market sentiment regarding the yen's trajectory over the coming year.