The U.S. dollar tumbled over 1% to a one-month low against the other major currencies on Wednesday, as Donald Trump appeared to be winning the U.S. presidential election.

Markets began pricing in owing to a Trump’s victory after the Republican candidate took the lead in the bellwether states of North Carolina, Ohio and Florida.

USDJPY risk-reversals:In a nutshell, short term bullish risks and long-term bearish risks.

Well, risk-reversals of this pair are still very much a work in progress as far as vol selling opportunities go, with current levels (3M 25D risk reversals at 1.8 vols for USD puts over USD calls) still removed from post-Brexit extremes (2.8), 1m IV skews to substantiate this signal offered by risk reversals.

If we do get close to those levels however, selling yen riskies should be highly attractive since the BoJ's yield curve control policy is proving more successful in capping JGB yields and suppressing yen vol than we had initially imagined, and a widening US-Japan yield gap as the Fed cycle resumes could conceivably even push USDJPY gradually higher towards the 105-107 area.

Needless to say, selling expensive yen calls should prove profitable amid such a mild updraft in USDJPY spot.

In spot FX, USDJPY plummeted more than 2.75% to 101.190 but recovered to trade the current 104.292 levels in the late European sessions. Japan reiterated its readiness to intervene in currency markets on Wednesday morning. The country's Finance Minister Taro Aso said on Tuesday that Tokyo will need to respond to moves in the currency markets if the U.S. election results cause a sudden spike in the yen.