The yen’s strength against the dollar has eroded profits of major Japanese exporters like Sony and Toyota, pouring more salt into the gaping wound that the slump in global demand has caused. This pain has prompted the Japanese government to launch a $16.7 billion fund to rescue key industries, whose very survival have been threatened by the financial crisis.
But all is not lost thanks to falling commodity prices. “As commodity prices dropped, we’ve seen the shortening of contracts … much less hedging amongst importers, and that allows them to benefit from the strong yen at the moment,” said Naomi Fink, Japan strategist at Bank of Tokyo Mitsubishi on CNBC Asia Pacific's "Protect Your Wealth".
Another way to protect your portfolio, Fink added, is to short commodity currencies like the Australian dollar and Brazilian real.