BofA says foreign hedging of Japanese equities is a main factor behind yen depreciation

MacroDigital Finance
โดย Investing.com·Read original
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Bank of America says foreign investors hedging their Japanese equity exposure may be a main factor behind the yen's depreciation since last year. The bank estimates foreign holdings of Japanese stocks reached roughly $2.2 trillion as of March 2025, broadly matching Japanese investors' overseas equity holdings. Japanese equities have significantly outperformed global markets over the past year, likely encouraging foreign investors to increase currency hedges and creating additional yen selling pressure that could amount to several trillion yen. The report notes that if Japanese equity outperformance fades, hedging-related selling may ease and the yen could stabilize, while a stock correction could trigger a temporary yen strengthening as hedges are unwound. Analysts add that current yen short positioning appears stretched and that continued Bank of Japan rate increases could support the currency.

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