This article explores the use of FX options as a hedge against currency risk in USD-denominated portfolios, focusing on the effects of a declining USDJPY rate. It presents a detailed example to demonstrate how investors can shield their investments from adverse currency movements, offering clear insights into managing currency fluctuations and the benefits of strategic hedging. Hedging USD portfolios against USDJPY currency risk Introduction For investors with significant holdings in USD-denominated assets, the challenge of currency fluctuations, especially when the USDJPY rate declines, is a key concern. ... (full story)