Short hedge on AUD/JPY currency futures

The Japanese yen weakened on Thursday as the market assessed the April month's retail sales and the prospects for continued easy monetary policy. Retail sales rose 5% YoY in April, the first rise in four months.

The Japanese investors were again good buyers of foreign bonds, buying a net JPY 911.8 bn as on the 22^nd May, confirmed Ministry of Finance Japan.

We noticed that Australia's total capex fell 4.4% in Q1 disappointing policy makers who view investment plans a key for the rate outlook.

Use a near month short futures position while owning the underlying currency to be delivered.

Margins required taking short positions in futures.

Should the underlying currency breach 95.041 levels, the fall up to 94.591 is expected which is next crucial support.

The leverage effects in the gains of the short futures position will equalize the fall in returns from the sale of the underlying currency.