I want to open a short position for USD/JPY that I intend to leave alone for a while in order to currency hedge my investments.
Last year, my US stocks appreciated quite a bit and I don't want to ride that roller coaster again, especially on the way down.
However, my broker has negative swap(-70 JPY/lot) for selling USD/JPY so I'd be losing money every day no matter if the pair goes up or down. Sure it's not much, but in 5 years it would be at best about -1%.
Does it make sense to buy a small amount of NZD/JPY(+800 JPY/lot) say 1:10 to cancel the swap or is the additional NZD currency risk not worth it?
As I see it, given that it's a long position, even if an asteroid were to hit New Zealand, I'd only be off about %5 of my US stock+hedge portfolio.
Hedge worst case |-5%| > no hedge best case |-1%|, but what about the average/expected case?