TOKYO — Asian insurers and other businesses have been helping strengthen Asian currencies in recent months by buying more protection against the U.S. dollar weakness.
These investors, who have large holdings of U.S. bonds and other securities, had little urgency to hedge when the dollar was strong. But they are now increasing their hedge ratios to protect against a fall in the greenback. This typically involves selling the dollar for local currencies, which appreciates the latter’s value.
