I am not sure why it is necessary to wait to buy out the fx...

I am not sure why it is necessary to wait to buy out the fx contracts. Simply putting on an opposing contract, long yen short A$, would close out the existing postions. If it were with the same counterparty no further margin should be required because it would be offsetting existing risk.

Investors are liquidating investments to pay back yen loans and this is fuelling the rise in the yen. GJT has A$1 billion of yen liabilities, including the forex contracts, and is therefore very vulnerable to the rising yen. Unfortunately the liquidation of investments means that the GJT asset side, which should be a natural hedge, is under pressure because the world is awash with unwanted real estate.

I am encouraged that the directors have been buying and I hope that they have some specific reasons for optimism. In Europe we have seen real estate values plummeting; British Land valuations, for example, have declined 25% in only six months. One director who invested 23 million euros in solid German property in April 2008 is already showing a loss of 17 million. Yen is the place to be and if GJT can reduce its yen liabilities, at least it has a reliable yen income stream.