You are a bank FX dealer. Looking at the Reuters screen, you see the following rates:

USD/JPY spot:

126.95

/

15

T/N:

2.5

/

1.5

3 months:

310

/

290

6 months:

550

/

510

USD/NOK spot:

6.7620

/

40

T/N:

0.2

/

0.5

3 months:

15

/

15 A/P

6 months:

50

/

100

Some time ago, your customer sold NOK receivables forward into JPY, and that deal matures on the date which is now the 3-month forward date. However he now discovers that these receivables will be delayed by three months because of late delivery of the goods. He therefore needs to adjust the forward deal. What forward-forward swap price do you quote him? He asks for a two-way price and prefers to have it quoted in terms of number of JPY per 1 NOK. Which side of the price do you deal on?
Your customer has another deal to sell NOK and buy JPY, also previously undertaken, also maturing on the 3-month forward date. He discovers first thing in the morning that he needs the JPY by tomorrow and that he will have enough NOK in his account tomorrow to cover this. He therefore uses another forward-forward deal to adjust this second deal in order to take delivery of it tomorrow. Again, what two-way price do you quote, and on which side do you deal?

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