Speculator with base currency of usd

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Reference no: EM132064553

Suppose you're a speculator with a base currency of USD. Your view is that JPY interest rates will go down more than the market expects. Instead of buying a physical JPY bond to implement your view, you decide to purchase a JPY bond future.

Question: When you put on the trade, do you have exposure to Yen? If not, why not? If so, why, and what do you do about hedging it. (Ignore issues of posting initial margin.)

Reference no: EM132064553

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