Resurgent Yen Faces Extra Boost From Insurers Chasing Hedges
- Insurers cut dollar hedging to lowest in over a decade
- Hedging more likely to gain on risk of a stronger yen: Mizuho
This article is for subscribers only.
A rush by Japan’s life insurers to protect themselves against a stronger yen may have the paradoxical effect of accelerating gains in the currency.
A Bloomberg analysis of the earnings reports of nine so-called lifers showed just 49.6% of their combined $310 billion of dollar assets was currency hedged at the end of September, down from 54.1% six months ago. That level of exposure -- known as half-naked in the jargon -- is the lowest in data going back to 2010 and market participants suggest it will have to rise.