Currencies
Japan’s Mighty Insurers Bet on Dollar Staying Strong for Longer
- Yen hedge ratio drops to 47% in March, least since 2011
- Weakness in yen typically leads to lower hedging with a lag
The yen has weakened 1.4% against the dollar in the past month, the worst performer among Group-of-10 currencies.
Photographer: Noriko Hayashi/BloombergThis article is for subscribers only.
Japanese life insurers dialed back their protection against a rebounding yen to a decade low and may cut those positions further in coming months.
Nine of the nation’s biggest life insurers had 47% of their foreign securities covered with derivatives that help shield them from losses in case the yen strengthens, according to the companies’ earnings reports as of March 31 compiled by Bloomberg. That’s the lowest since September 2011 and compares with a high of 63% in March 2020.