Bonds, Interest Rates & Exchange Rates

Are products invested in foreign currency given higher risk grades?

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Under the criteria for determining the risk grade of investment products, products invested in foreign currency, such as foreign-currency-denominated funds and overseas bonds, in principle have their overall risk grade raised by 1 grade to account for exchange rate risk.

If the currency is extremely volatile, the grade may be raised by up to 2 grades, and if currency hedging has substantially reduced the exchange rate impact, it may not be raised. This means the same asset can carry a different level of risk depending on the currency and whether it is hedged.

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This answer is general financial information as of 14‏/10‏/2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.