日本語
Yen real value since 1964Weak 57
Now 62
180 Strong

What it means for your money

Key points

  1. ¥1 million in US stocks bought with the yen cheap in Jun 2007 (¥123) was worth ¥0.65 million unhedged and ¥0.98 million hedged five years later. Bought with the yen at its strongest in Oct 2011 (¥77): ¥2.56 million unhedged, ¥1.89 million hedged. When you bought flipped which was better. Over the full 53 years it was close to even: 10.1% a year unhedged, 9.3% hedged.
  2. What decided it was the yen's level at the start. Starting with the yen cheap, hedging won by 2.3% a year over five years; unhedged won only 32% of the time. Starting with the yen dear, unhedged won by 3.2% a year.
  3. But hedging now costs about 2.7% a year (the short-rate gap). In real Tokyo ETFs since 1 Jul 2020, unhedged returned +305% and hedged +126%: unhedged has won big in recent years.
  4. The biggest past yen surge was 51% in three years (1985→1988). A move from today's ¥157 back to ¥120 would cut foreign assets by 24% in yen.

Starting with a cheap yen, hedging paid off

Currency hedging removes exchange-rate swings in exchange for paying the short-term rate gap. Buying foreign assets with the yen cheap leaves you exposed to a later rebound. The past 50 years show the difference clearly.

US stocks held five years: annual return in yen (average)Every month from March 1973 as a start, held five years (582 cases). Split by the yen's real value when starting (below 98 = cheap, 123+ = dear). It is 62 now.
Show the numbers
UnhedgedHedged
Started with yen cheap8.2%10.5%
Middle9.8%9.5%
Started with yen dear12.7%9.5%
Asset, horizonYen at startUnhedgedHedgedDifferenceUnhedged wonCases
US stocks・5yStarted with yen cheap8.2%10.5%-2.3%32%155
US stocks・5yMiddle9.8%9.5%+0.3%57%213
US stocks・5yStarted with yen dear12.7%9.5%+3.2%76%214
US stocks・10yStarted with yen cheap10.0%11.7%-1.7%25%124
US stocks・10yMiddle10.1%10.5%-0.4%49%184
US stocks・10yStarted with yen dear9.8%7.7%+2.2%79%214
US 10y bonds・5yStarted with yen cheap2.3%4.7%-2.4%32%155
US 10y bonds・5yMiddle4.1%4.1%0.0%57%213
US 10y bonds・5yStarted with yen dear7.6%4.7%+2.9%76%214
US 10y bonds・10yStarted with yen cheap4.5%6.3%-1.7%25%124
US 10y bonds・10yMiddle4.5%5.0%-0.5%49%184
US 10y bonds・10yStarted with yen dear6.1%4.1%+2.0%79%214

Fifty years of compounding

US stocks: 1 invested, value in yen (dividends reinvested, log scale)1 invested in Mar 1973 is now 173× unhedged and 115× hedged. Hedged is approximated as US returns plus the short-rate gap (actual hedging costs and fees not included). Until around 1980 Japan restricted foreign investment, so hedging was hard in practice.
Show the numbers
DateUnhedgedHedged
Jan 19741×1×
Jan 19751×1×
Jan 19761×1×
Jan 19771×1×
Jan 19781×1×
Jan 19791×1×
Jan 19801×1×
Jan 19811×2×
Jan 19821×2×
Jan 19832×2×
Jan 19842×2×
Jan 19853×2×
Jan 19863×3×
Jan 19873×4×
Jan 19882×4×
Jan 19892×4×
Jan 19903×5×
Jan 19913×5×
Jan 19924×6×
Jan 19934×7×
Jan 19944×8×
Jan 19954×8×
Jan 19965×11×
Jan 19978×13×
Jan 199811×16×
Jan 199912×20×
Jan 200013×21×
Jan 200114×20×
Jan 200213×16×
Jan 20039×12×
Jan 200411×16×
Jan 200511×17×
Jan 200614×18×
Jan 200717×20×
Jan 200815×18×
Jan 20098×11×
Jan 201010×15×
Jan 201111×18×
Jan 201211×19×
Jan 201315×22×
Jan 201421×27×
Jan 201527×31×
Jan 201627×31×
Jan 201732×37×
Jan 201839×46×
Jan 201937×44×
Jan 202045×52×
Jan 202150×61×
Jan 202269×75×
Jan 202372×67×
Jan 202497×77×
Jan 2025131×93×
Jan 2026153×105×
Aug 2026173×115×

The cost of hedging

Hedging cost guide: US 3-month rate minus Japan overnight rateWhen positive, hedging takes this much off returns each year.
Show the numbers
DateHedging cost (annual)
Jan 19860.0%
Jan 19871.1%
Jan 19882.1%
Jan 19894.2%
Jan 19901.1%
Jan 1991-1.8%
Jan 1992-1.7%
Jan 1993-0.9%
Jan 19940.7%
Jan 19953.5%
Jan 19964.5%
Jan 19974.5%
Jan 19984.6%
Jan 19994.1%
Jan 20005.3%
Jan 20014.9%
Jan 20021.6%
Jan 20031.2%
Jan 20040.9%
Jan 20052.3%
Jan 20064.2%
Jan 20074.7%
Jan 20082.2%
Jan 20090.0%
Jan 20100.0%
Jan 20110.1%
Jan 2012-0.1%
Jan 20130.0%
Jan 20140.0%
Jan 20150.0%
Jan 20160.2%
Jan 20170.6%
Jan 20181.4%
Jan 20192.4%
Jan 20201.6%
Jan 20210.1%
Jan 20220.2%
Jan 20234.6%
Jan 20245.2%
Jan 20253.9%
Jan 20262.8%
Aug 20262.7%
Tokyo S&P 500 ETFs: unhedged (1655) vs hedged (2563), 1 Jul 2020 = 100Adjusted for dividends (Yahoo Finance). The weakening yen from 2021 coincided with rising hedging costs.
Show the numbers
DateUnhedgedHedged
1 Jul 2020100100
6 Aug 2020105108
10 Sep 2020109110
19 Oct 2020112114
24 Nov 2020114117
28 Dec 2020117121
3 Feb 2021122125
11 Mar 2021130128
14 Apr 2021138135
24 May 2021138136
25 Jun 2021145140
2 Aug 2021148145
6 Sep 2021152149
12 Oct 2021150143
16 Nov 2021164154
21 Dec 2021161152
27 Jan 2022151141
8 Mar 2022153144
12 Apr 2022176152
20 May 2022160135
23 Jun 2022163128
28 Jul 2022174137
1 Sep 2022176134
7 Oct 2022174126
14 Nov 2022178134
19 Dec 2022169130
25 Jan 2023168134
1 Mar 2023175133
5 Apr 2023174137
12 May 2023180137
15 Jun 2023200145
20 Jul 2023206150
24 Aug 2023211147
28 Sep 2023208140
2 Nov 2023208138
8 Dec 2023215148
17 Jan 2024229152
21 Feb 2024244159
28 Mar 2024260167
2 May 2024258160
7 Jun 2024274170
11 Jul 2024299178
16 Aug 2024272174
20 Sep 2024268178
28 Oct 2024295182
2 Dec 2024299186
9 Jan 2025309182
14 Feb 2025309188
24 Mar 2025283174
25 Apr 2025262168
3 Jun 2025281180
7 Jul 2025301190
12 Aug 2025315194
16 Sep 2025324200
22 Oct 2025341203
28 Nov 2025357205
6 Jan 2026361208
10 Feb 2026361208
18 Mar 2026359202
22 Apr 2026378211
1 Jun 2026406226
3 Jul 2026406222
7 Aug 2026410228
11 Sep 2026394225
29 Sep 2026406226

What a stronger yen takes away

How much foreign assets lose in yen if the dollar falls from today’s level. The second table lists the largest yen surges since 1973, ranked by the three-year fall in USD/JPY (overlapping periods merged).

If USD/JPY goes toForeign assets in yen
¥140-11%
¥130-17%
¥120-24%
¥100-36%

Change from today’s 157.36 (29 Sep 2026), before any move in the assets themselves.

PeriodUSD/JPY3-year change
Mar 1985→Mar 1988258 → 127-51%
Oct 1975→Oct 1978302 → 184-39%
Apr 1992→Apr 1995134 → 84-37%
Aug 2008→Aug 2011109 → 77-30%
Dec 2005→Dec 2008118 → 91-23%

Tools available in Japan

ToolHow currency and rates affect it
Foreign stocks and bonds, unhedgedGains when the yen weakens and loses when it strengthens. Buying now means buying with the yen at a historically weak level.
Currency-hedged funds and ETFsRemoves most of the currency swing in exchange for paying the short-term rate gap each year (the hedging cost below). Tokyo lists hedged and unhedged versions of the same index (e.g. iShares S&P 500 ETFs 1655 and hedged 2563).
Floating-rate JGBs for individuals (10-year)The coupon resets every six months (10-year JGB yield × 0.66), so it rises with Japanese rates. It stays in yen, so there is no currency risk.
Yen depositsNo currency risk, but if prices rise faster than the deposit rate, what the money can buy shrinks.
GoldGold bought in yen moves with both the dollar gold price and the exchange rate. Its premise is checked on a separate site.

JGBs for individuals: Ministry of Finance, JGBs for individual investors. Gold’s premise is checked in Gold Premise Watch. Not a recommendation of any product.

Updated 29 Sep 2026 12:04 JST · real effective rate to Jul 2026 · balance of payments to Jul 2026