Buyers scrap Japan fund hedges after yen plunge

Wealth managers are reducing their exposure to hedged share classes in their Japanese fund holdings, in the belief that further yen depreciation now looks less likely.

The yen has fallen from a peak of under ¥80 to the dollar in 2012 to around ¥120, following the Bank of Japan's most recent QE announcement in October. The currency first slumped following the announcement by Prime Minister Shinzo Abe of an aggressive QE package in April 2013. Investors in Japanese equities rushed to protect portfolios by buying sterling-hedged share classes, many of which had been quickly launched by fund groups to meet growing demand. With the pound also having strengthened further against the yen, Stanhope Capital's CIO Jonathan Bell is among investors reducing ...