Japan Inc Rushes to Lock In Exchange Rates as Yen Continues to Plummet

Japanese companies are increasingly turning to long-dated currency hedges as the yen remains mired near multi-decade lows. Some firms now seek to lock in exchange rates for as long as five to ten years, a significant departure from traditional hedging practices.

The shift reflects growing frustration among corporate Japan with a currency that has lost more than 30 percent of its value against the dollar over the past five years, defying repeated intervention efforts. Companies like Takara MC are pushing for direct and longer-term contracts with overseas suppliers to lock in prices and exchange rates for up to a year at a time.

Taku Ueno, chief executive of Takara MC, has watched the cost of imported beef from America climb as the yen weakens. 'For US beef, we used to negotiate every month, but the exchange rate is changing so quickly we now negotiate every three months,' he said.