How to hedge against rising JPY

[nateynate]

How would somebody who is experiencing a difficult time in the real economy from a rising JPY, hedge against future rise?

Today the USD will buy about 83 JPY. What sort of option trade could I execute to make a profit if the JPY goes lower? The way the USD and JPY are paired, is it strike or put on 81? Is this the cheapest and risk managed way to protect against a rising yen? Are there any other ideas that I'm overlooking:?:

Sorry if my question is newbie. Thanks for your time.

 

[scose-no-doubt]

depends whether you want to hedge savings or transactions.

 

[nateynate]

for savings and income in USD...

 

[Martinghoul]

Buy USDJPY puts, struck wherever you think your point of pain comes.

 

[scose-no-doubt]

I only know basics so I'd say long JPY position with nominal value = to savings and for the transactions you could possibly do some projected cash flows and work out some values to hedge against through futures or go the full whack and get hedged in the money market (aaargh).
Either way you're gonna have some sort of opp cost or premium involved so you'll need to see whether that will outweigh the benefits of locking in the exchange as it stands.
Seems like a lot of work.
Hope someone with more experience comes and helps.

 

[scose-no-doubt]

Oh well. MG has posted while I was writing and negated both my method and my assumption that it will be a lot of work. Brilliant.

 

[nateynate]

the pain started about 10 points ago. thanks guys.

 

[Martinghoul]

Oh well. MG has posted while I was writing and negated both my method and my assumption that it will be a lot of work. Brilliant.

You're right, though, in that one should do the work and actually go through some scenario analysis.

I confess to being somewhat flippant, which is not nice.