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Because that was 1985, and this is now. Entire supply chains, input costs, planning, etc. have been built around the assumption of the JPY trading in some sort
by weakened_malloc 1mo ago
Because that was 1985, and this is now. Entire supply chains, input costs, planning, etc. have been built around the assumption of the JPY trading in some sort of range.
Of course that will change over time, if it hasn't already. The Japanese government's messaging about this has been that they're not really worried about the currency weakening (after all they're massive net exporters! it should be a good thing), but rather the speed at which it's happening.
- afarah1 1mo agoMost large companies hedge their exposition to FX rates.
- reactordev 1mo agoFX futures, but yes.
- weakened_malloc 1mo agoMany don't though, and even if they all did, you can't hedge forever. Hedges are also rolling, so as some hedges expire the companies need to set up new hedges, which are at a worse FX rate. So the hedges lessen the impact but they aren't perfect, otherwise they would not be called 'hedges'.