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Foreign exchange investment

Some investment products aim to generate margins by taking advantage of fluctuations in exchange rates. Foreign investment trusts managed with foreign bonds and foreign stocks also use foreign exchange, and foreign exchange also uses foreign currency receivables to buy foreign bonds, foreign currency investment trusts called MMFs, and foreign exchange margin trading to buy and sell foreign currencies. Without it, it will not be established. There are many advantages to investing in such foreign exchange. One of the advantages is the difference in the policy interest rates of each country, that is, the difference in interest rates between nations. There is a word “zero interest rate”, but the interest rate of the Japanese yen is so low. The interest rate of the yen is low, so even if you deposit money in Japan, you will only earn interest as much as the tears of a sword. Although there are differences depending on the country, depositing in the high interest rate currencies Australian dollar and New Zealand dollar can earn interest that is unthinkable in Japanese yen. Another advantage is that you have assets other than the Japanese yen in case the value of the Japanese yen drops significantly in the future. It’s easy to forget that you’re only in Japan, but the Japanese yen doesn’t have an unchanging value. There is a risk that the value will decline due to natural disasters or terrorism. Even if there are no sudden events such as terrorism or disasters, there is a possibility that the yen will depreciate if the economies of other countries grow rapidly compared to Japan. In such a case, assets with only Japanese yen will eventually decrease. By exchanging part of the assets for foreign currency in terms of asset management, we can expect a risk aversion effect that avoids part of the assets from the country risk of Japan.


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