Japan Inc Turns to Creative Hedges Amid Yen's Long Decline

Taku Ueno's supermarkets in Japan are struggling to cope with the relentless fall of the yen. As imports become more expensive, he is looking for new ways to hedge against further weakness.

The yen has declined despite currency intervention in 2022, 2024, and 2026, and recent joint US-Japan buying efforts have not been enough to steady its value. Ueno, CEO of Takara MC, which operates 43 supermarkets, is now negotiating direct contracts with suppliers that lock in prices and exchange rates for up to a year.

This strategy allows him to avoid frequent price hikes, but it's not an easy task given the yen's decline over the past five years. It has lost more than 30% of its value against the dollar during this period, making Japan's imports increasingly expensive.