Yen rise triggers PRDC hedging
The yen hit its highest level against the dollar since August 1995 on March 17, spurring activity by banks rushing to hedge exposures to power-reverse dual currency notes (PRDCs) and other similar structured products, say dealers.
The currency touched Yen95.76 against the dollar on March 17, up from Yen111 at the beginning of the year. It subsequently closed at Yen99.71 on March 27. The sharp appreciation has left dealers jostling to rebalance PRDC hedges in the yen swaps and options markets.
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