The Yen Hit ¥159 and My U.S. Funds Hit a Record. As a Tokyo Resident, That's Not a Win — It's a Hedge

I went to my local supermarket in Tokyo last week and noticed the chocolate I always buy felt lighter.

Same package, same price. Smaller bar inside. Shrinkflation, but in the most literal sense — the company quietly trimmed grams instead of raising the sticker.

I came home, opened the SBI Securities app for an unrelated reason — month-end portfolio check — and the number was an all-time high.

This has been the rhythm of April 2026 for me. Every grocery run reminds me prices are climbing. Every brokerage check reminds me my dollar-denominated funds are climbing in the opposite direction. They are connected. Same coin, different sides.

Quick Japan Context

If you’re new to the setup: I live in Japan, earn yen, and pay yen-denominated bills. The local cost-of-living is sensitive to import prices, which are in turn sensitive to USD/JPY.

USD/JPY is sitting around 159 right now. For Americans visiting Tokyo, that’s a discount holiday. For Tokyo residents, it’s a slow squeeze on groceries, gas, and basically anything imported.

This matters because most of my long-term investments are denominated in U.S. dollars — through Japanese index funds that hold U.S. stocks. The numbers below are the yen-side view of those holdings.

The Portfolio

Here’s roughly what my fund portfolio looks like, translated to USD at ~¥150:

Fund	Approx. value
Total U.S. stock index	~$175K
All-Country (global)	~$47K
FANG+	~$23K
Leveraged NASDAQ	~$21K
NASDAQ-100	~$13K
Total	~$267K

Roughly 80% of my total household assets sit in funds that are exposed to the dollar.

Unrealized gain is around $147K after eight years of monthly contributions.

I started buying when USD/JPY was somewhere near 110. Today it’s near 159. So a chunk of that gain — back-of-envelope, around $65K — is just the currency translation effect. The yen got weaker, and my yen-denominated balance got bigger, even though I haven’t sold anything.

That’s a number I’m still working out how to feel about.

Why I Skipped Currency-Hedged Funds

When I first set up this allocation, I didn’t bother with any currency-hedged versions of these index funds. Two reasons.

First, the cost stack. Hedged versions usually charge a slightly higher expense ratio, and on top of that they pay a rolling hedge cost — basically the short-term interest rate gap between the U.S. and Japan. Compound that over a decade and it eats real returns.

Second, the math of dollar-cost averaging. When you buy monthly for 15-20 years, your purchase rate gets averaged across hundreds of different yen levels. Some months you bought at ¥110, some at ¥150, some at ¥159. The “blended cost basis” smooths itself out.

Hedging on top of that is paying a continuous cost to flatten a curve that’s already self-averaging. It only makes sense if you’re confident which direction the yen is going.

I’m not confident. So I didn’t hedge.

That decision was made in year one and I haven’t revisited it since.

Eight Years Ago, I Wasn’t Planning for This

Honestly? The dollar-heavy allocation was an accident.

In 2018, when I started, USD/JPY was around 110. I picked S&P 500 and All-Country index funds because they had strong long-term track records, low expense ratios, and broad diversification. Nothing about my reasoning involved “the yen will weaken and these will become a currency hedge.”

That part was pure luck.

I only started noticing the hedge dynamic when prices started visibly moving. Grocery shelves quietly relabeled. Gas station signs creeping up every few weeks. Restaurant menus reprinted with bigger numbers. Every time I felt that imported inflation in my daily life, my brokerage screen was moving in the opposite direction.

That’s when the meaning of the dollar exposure changed in my head. Not the holdings — they’re identical. The frame around them.

It’s Not Profit. It’s a Hedge.

This is the table I keep coming back to:

Yen movement	Dollar-denominated assets	Cost-of-living in Japan
Yen weakens	Yen-translated value rises	Imported goods get pricier
Yen strengthens	Yen-translated value falls	Imported goods get cheaper

Whichever way the currency moves, my household + portfolio combined ends up roughly balanced.

Once I saw the table written out, calling the recent gains “profit” felt off. If they’re moving in lockstep with my actual cost-of-living going up, the net real benefit is much smaller than the headline number. The currency-translated part of my unrealized gain is, in plain terms, an offset to imported inflation I’m paying for at the supermarket.

The flip side is uncomfortable to imagine. If I’d been 100% in yen-denominated assets, this stretch of imported inflation would have hit my household with no counterweight at all. That’s the version of the last three years that I quietly avoided by accident.

“Hold some dollars precisely because you live in Japan.” It took eight years for that one sentence to actually mean something to me.

What If the Yen Strengthens?

The obvious counter: “If you only made money because the yen got weaker, you’re going to lose it back if the yen strengthens.”

That’s fair. If USD/JPY drifts back to 140, 130, 120, the yen-translated value of my funds will fall. Real money. Visible on the screen.

My plan in that scenario is the same plan I have now: I don’t sell, I don’t pause contributions.

The reasoning is symmetric. I couldn’t predict yen weakness in 2018. I can’t predict yen strength in 2026. Anyone who claims they can predict currency direction is either selling something or already a billionaire.

And here’s the part that makes the math less scary: when the yen strengthens, my cost-of-living also softens. Grocery prices ease, gasoline dips, imports get cheaper. Yes, the portfolio number drops. But the household pressure drops too. Same balance, opposite direction.

Honestly, while writing this, I caught myself wishing for both — “give me a stronger yen for groceries but keep my portfolio at record highs.” You can’t have both. The yen is one variable; both my assets and my expenses sit on opposite sides of it.

What I’d Tell Someone Outside Japan

If you don’t live in Japan, your version of this article isn’t about USD/JPY. But the underlying idea travels.

Your home currency, your home country’s cost-of-living, and the currency mix of your investment portfolio are connected. Most people only think about one of them at a time. The interesting question isn’t “what’s my portfolio worth in my home currency?” It’s “what does my portfolio do for me when imported goods get more expensive — or cheaper — in my actual life?”

For an American holding all-U.S. equities, that question barely registers. Your assets and your costs ride the same currency.

For anyone living in a smaller economy with imported food, energy, or technology, the question is real. Cross-currency exposure is a hedge against your own cost-of-living, whether you planned it that way or not.

I didn’t plan it that way. I got there by accident and noticed eight years later. Worth noticing earlier than that.

What I’m Doing Right Now

For the record:

• Not switching to currency-hedged versions
• Not taking profits on the yen-translated gain
• Not changing the allocation between dollar-exposed and yen-denominated assets
• Continuing to contribute monthly, same as before

Tomorrow my paycheck will land in yen. The supermarket sticker on that chocolate bar will probably get rewritten again at some point. The brokerage app I’ll quietly check at the end of the month.

This is a personal record of one investor’s reasoning. Not investment advice. Currency markets are unpredictable, and past performance doesn’t guarantee anything.