Japan Inc Seeks New Hedges Amid Yen's Long Decline

Japan Inc is seeking new hedges to protect against a long era of yen weakness. The yen hit a near 40-year low in July, just shy of 164 per dollar, before authorities intervened.

Taku Ueno, chief executive of Takara MC, which operates 43 supermarkets south of Tokyo, has pushed for direct and longer-term contracts with his overseas suppliers to lock in prices and exchange rates at up to a year at a time.

This helps him avoid raising prices too quickly, which risks losing customers. Others are turning to futures, forwards, and options to hedge against further yen weakness as authorities struggle to come up with fresh ways to steady or turn the currency.