Japanese Companies De-risking Overseas Ventures as Yen Weakens

Tuesday, 26 March 2024, 02:02

The weakening yen is prompting Japanese companies to take on more risk in global mergers and acquisitions by skipping hedging strategies. This shift in approach is driven by a bet that the yen will remain weak, leading to potential cost savings and increased competitiveness. However, the decision to forgo hedges introduces currency risk, which could impact the bottom line of these companies in the long run.
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Japanese Companies De-risking Overseas Ventures as Yen Weakens

Weak Yen Bets Seen in Japanese Skipping Hedges on Overseas Deals

Japanese companies are increasingly taking the risk of not hedging against the weakening yen in their overseas deals, aiming for potential cost savings and enhanced competitiveness.

This strategy, while beneficial in the short term, exposes them to currency risks that could impact their financial performance in the future.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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