Easy way to protect against yen weakness

[adamu]

Bear in mind that trading US stocks on Rakuten, whether via settlement in yen or via converting to/from USD separately, costs 0.25 yen spread per dollar, plus the trading fees are higher than for yen-based investments.

[ToushiTime]

Q and A - https://www.rakuten-sec.co.jp/web/info/ ... 27-01.html

Also see the "は" section for an explanation on foreign bonds. https://www.rakuten-sec.co.jp/web/bond/learn_iroha/

Thanks for those links. So, I already have a tokutei kouza (genzenchoshu ari). Does that mean I can just go ahead and buy dollar-denominated MMFs and dollar-denominated bonds/Treasuries without creating an FX account or other sub-accounts beforehand? I think I need to open a gaigoku kabushiki account if I want to trade individual overseas stocks (not bonds), correct?

I have a Rakuten and Monex account (both tokutei kouza).

When I bought a US domiciled etf with Monex, no extra account was requested.

You
A. Send money to your foreign trading account, which was created automatically upon initial application.
B. You convert YEN->USD
C. Your foreign trading account is credited in USD. Which exist in a USD MMF. (And thus taxed normally, and not like FX holdings).
D. Buy asset in USD on Tradestation.

Now I have never sold anything. but if I did...

E. Sale happens, 20% of capital gains withheld.
F. Funds sit in MMF until you withdraw.
G. You can either 1. Withdraw in Yen or 2. Keep it in a USD MMF funds or possibly 3. Transfer to a USD account elsewhere.

Now there are some very valid reason NOT to keep something in a MMF, and instead get a USD bank account with SONY or the like if you are holding long-term and not reinvesting in USD.

**Note it seems Dividends are paid into the MMF as well.

Thanks. I don't have a Monex account. How does that apply to Rakuten Securities?
Do I simply buy dollars from the 外国為替（価格情報） page? I guess those dollars go straight into a 外貨建MMF?
I have accounts opened for trading of 外国証券（為替取引/米国株式/中国株式/アセアン株式/外国債券）and 外貨建MMF.
How do I buy an asset in USD on Rakuten? What is their equivalent of Tradestation?

[Haystack]

Thanks for those links. So, I already have a tokutei kouza (genzenchoshu ari). Does that mean I can just go ahead and buy dollar-denominated MMFs and dollar-denominated bonds/Treasuries without creating an FX account or other sub-accounts beforehand? I think I need to open a gaigoku kabushiki account if I want to trade individual overseas stocks (not bonds), correct?

I have a Rakuten and Monex account (both tokutei kouza).

When I bought a US domiciled etf with Monex, no extra account was requested.

You
A. Send money to your foreign trading account, which was created automatically upon initial application.
B. You convert YEN->USD
C. Your foreign trading account is credited in USD. Which exist in a USD MMF. (And thus taxed normally, and not like FX holdings).
D. Buy asset in USD on Tradestation.

Now I have never sold anything. but if I did...

E. Sale happens, 20% of capital gains withheld.
F. Funds sit in MMF until you withdraw.
G. You can either 1. Withdraw in Yen or 2. Keep it in a USD MMF funds or possibly 3. Transfer to a USD account elsewhere.

Now there are some very valid reason NOT to keep something in a MMF, and instead get a USD bank account with SONY or the like if you are holding long-term and not reinvesting in USD.

**Note it seems Dividends are paid into the MMF as well.

Thanks. I don't have a Monex account. How does that apply to Rakuten Securities?
Do I simply buy dollars from the 外国為替（価格情報） page? I guess those dollars go straight into a 外貨建MMF?
I have accounts opened for trading of 外国証券（為替取引/米国株式/中国株式/アセアン株式/外国債券）and 外貨建MMF.
How do I buy an asset in USD on Rakuten? What is their equivalent of Tradestation?

I have never done it. You have the info, why not experiment? Try with 1000 Yen or so first.

VT, VOO and QQQ (among others) trade free on Rakuten. Give them a Go.

[ToushiTime]

OK thanks again, I will check further.
Just one more question: why is it better to hold dollars in a bank rather than in an MMF if I just want to hold dollars long term?
The 10 million yen "pay-off" protection scheme for Japanese bank deposits doesn't apply to foreign currency holdings.
Do you mean there is the added risk of the MMF fund going bust?

[Haystack]

OK thanks again, I will check further.
Just one more question: why is it better to hold dollars in a bank rather than in an MMF if I just want to hold dollars long term?
The 10 million yen "pay-off" protection scheme for Japanese bank deposits doesn't apply to foreign currency holdings.
Do you mean there is the added risk of the MMF fund going bust?

There is no deposit protection, and I believe MMF funds particularly often have less protection. However, a treasury note or strip once purchased is obviously incredibly secure. Not all MMF are the same though, many banks offer them with different terms.

If you want to hold USD in cash. Get a proper account with a bank IMO.

With Rakuten the simplest thing to do would be to deposit yen, buy USD, then buy a treasury ETF. However, the notes and strips guarantee a return, while an ETF does not.

The market has tons of Treasury ETFs to suit everyone's risk tolerance and timeframe. From ultra-short, to ultra long, and everything in-between, including tips.

In a rate-changing environment you probably want to A. Want to be in a short-term ETF or B, a bond ladder with ETFS. (See ibond series).