Japanese life insurers cut bullish yen hedges to 14-year low

Japanese life insurers cut protection for their foreign assets against a stronger yen to a fresh 14-year low, signaling subdued expectations of a sustained rally in the nation’s currency.

Nine of Japan’s biggest life insurers collectively lowered bullish yen wagers tied to their foreign investment holdings to 44.4% at the end of the fiscal half in March, compared with 45.2% six months earlier, according to an analysis of their earnings reports.

While U.S. President Donald Trump’s administration’s unpredictable policymaking has stoked foreign exchange market volatility, that wasn’t enough to stop a three-year decline in yen hedging. The Bank of Japan’s policy interest rate is still 3 percentage points lower than the nation’s inflation rate, with the next potential hike seen further delayed.