Mitigating foreign exchange risk through foreign-currency procurement, local sourcing and foreign exchange forwards
First written in FY2016. 9 of 14 entries say "Restated". Latest entry: FY2025.
The whole theme swung hardest in 2020: 3 of 15 companies on the "Worse" side.
19 other companies' latest entry also says "Restated".
- FY2025RestatedAnnual report
「Transactions between overseas subsidiaries and the head office in Japan are generally conducted in local currencies to reduce the subsidiaries' foreign exchange risk. The risk is then centralized at the head office, where comprehensive foreign exchange hedging and other measures are undertaken from Japan. Overseas subsidiaries also use foreign exchange contracts and other instruments as necessary to reduce foreign exchange risk. To reduce the impact of foreign exchange movements on operating profit, the group is promoting purchases denominated in US dollars and sales transactions denominated in yen and Chinese yuan.」
The use of local-currency transactions, centralized foreign exchange hedging at the head office, purchases denominated in US dollars, and sales denominated in yen and Chinese yuan continues. - FY2024RestatedAnnual report
「Transactions between overseas subsidiaries and the head office in Japan are generally conducted in local currencies to reduce the subsidiaries' foreign exchange risk. The risk is then centralized at the head office, where comprehensive foreign exchange hedging and other measures are undertaken from Japan to reduce foreign exchange risk.」
The use of local-currency transactions, centralized foreign exchange hedging at the head office, purchases denominated in US dollars, and sales denominated in yen and Chinese yuan continues. - FY2022RestatedAnnual report
「Transactions between overseas subsidiaries and the head office in Japan are generally conducted in local currencies to reduce the subsidiaries' foreign exchange risk. The risk is then centralized at the head office, where comprehensive foreign exchange hedging and other measures are undertaken from Japan. Overseas subsidiaries also use foreign exchange contracts and other instruments as necessary to reduce foreign exchange risk. To reduce the impact of foreign exchange movements on operating profit, the group is promoting purchases denominated in US dollars and sales transactions denominated in yen and Chinese yuan.」
The full-year risk disclosure specifies measures including transactions in local currencies, centralized foreign exchange hedging at the head office, purchases denominated in US dollars, and sales denominated in yen and Chinese yuan. - FY2021-Q2RestatedAnnual report
「The company and its subsidiaries use foreign exchange contracts and borrowings denominated in the local currencies of overseas subsidiaries to hedge foreign exchange risk associated with net investments in overseas subsidiaries and other entities.」
The use of foreign exchange contracts and borrowings denominated in local currencies to hedge foreign exchange risk associated with net investments continues. - FY2020RestatedAnnual report
「The company and its subsidiaries use foreign exchange contracts and borrowings denominated in the local currencies of overseas subsidiaries to hedge foreign exchange risk associated with net investments in overseas subsidiaries and other entities.」
The use of foreign exchange contracts and borrowings denominated in local currencies to hedge foreign exchange risk associated with net investments continues. - FY2019RestatedAnnual report
「A rapid appreciation of the yen against these currencies would affect earnings through lower revenue and profit, among other effects. To mitigate this risk, the group is increasing its purchases of raw materials denominated in foreign currencies and shifting to local sourcing of materials consumed at overseas sites. In addition, the value of investment assets and liabilities overseas is translated into yen in the financial statements, resulting in translation differences from exchange rate movements. The group has taken measures to address exchange rate movements, including foreign-currency financing and entering into foreign exchange contracts.」
The full-year risk disclosure also confirms the use of foreign-currency raw material purchases, local sourcing, foreign-currency financing and foreign exchange contracts as mitigation measures. - FY2018RestatedAnnual report
「The company and its subsidiaries use foreign exchange contracts and borrowings denominated in the local currencies of overseas subsidiaries to hedge foreign exchange risk associated with net investments in overseas subsidiaries and other entities.」
The policy of using foreign exchange contracts and borrowings denominated in local currencies to hedge foreign exchange risk associated with net investments continues. - FY2018-Q3RestatedAnnual report
「The company and its subsidiaries enter into forward foreign exchange contracts, spot foreign exchange forward contracts, currency swap contracts and currency option contracts, primarily to manage foreign exchange risk related to foreign-currency-denominated assets and liabilities and forecast transactions, and enter into interest rate swap contracts to manage interest rate risk. They also enter into commodity futures contracts to manage the risk of fluctuations in raw material prices.」
The use of multiple foreign exchange derivatives, interest rate swaps and commodity futures as risk management instruments continues to be disclosed. - FY2018-Q2Additional disclosure of interest rate swapsAnnual report
「The company and its subsidiaries enter into forward foreign exchange contracts, spot foreign exchange forward contracts, currency swap contracts and currency option contracts, primarily to manage foreign exchange risk related to foreign-currency-denominated assets and liabilities and forecast transactions, and enter into interest rate swap contracts to manage interest rate risk. They also enter into commodity futures contracts to manage the risk of fluctuations in raw material prices.」
In addition to the existing hedging of foreign exchange and raw material price risks, the use of interest rate swaps to manage interest rate risk is explicitly disclosed. - FY2018-Q1Details of instruments used to hedge net investmentsAnnual report
「The company and its subsidiaries use foreign exchange contracts and borrowings denominated in the local currencies of overseas subsidiaries to hedge foreign exchange risk associated with net investments in overseas subsidiaries and other entities.」
For net investment hedges, the disclosure specifies the use of borrowings denominated in the local currencies of overseas subsidiaries in addition to foreign exchange contracts. - FY2017AdvancedAnnual report
「The company hedges foreign exchange risk arising from operating activities with forward foreign exchange contracts. As a general policy, it hedges based on up to 50% of foreign-currency trade receivables expected to arise over the following 6 months. In addition, beginning in the current fiscal year, it has applied hedge accounting to some net investments.」
In addition to the existing hedging policy of 6 months and up to 50%, hedge accounting was applied to some net investments beginning in the current fiscal year. - FY2017-Q3RestatedAnnual report
「The company and its subsidiaries enter into forward foreign exchange contracts, spot foreign exchange forward contracts, currency swap contracts and currency option contracts, primarily to manage foreign exchange risk related to foreign-currency-denominated assets and liabilities and forecast transactions. They also enter into commodity futures contracts to manage the risk of fluctuations in raw material prices.」
The use of multiple foreign exchange derivatives and commodity futures as risk management instruments continues to be disclosed. - FY2017-Q2Details of hedged items and instrumentsAnnual report
「The company and its subsidiaries enter into forward foreign exchange contracts, spot foreign exchange forward contracts, currency swap contracts and currency option contracts, primarily to manage foreign exchange risk related to foreign-currency-denominated assets and liabilities and forecast transactions. They also enter into commodity futures contracts to manage the risk of fluctuations in raw material prices.」
In addition to the existing foreign exchange hedging policy, the disclosure specifies multiple foreign exchange hedging instruments and the use of commodity futures to address fluctuations in raw material prices. - FY2016First statedAnnual report
「The company hedges foreign exchange risk arising from operating activities with forward foreign exchange contracts. As a general policy, it hedges based on up to 50% of foreign-currency trade receivables expected to arise over the following 6 months.」
The hedging criteria of 6 months and up to 50% are explicitly stated.