A knock-out forward can be built by buying a knock-out call and selling a knock-out put with the same strike price and barrier. No public source describes a specific construction, so this follows from the definition of zero-cost and the barrier option formulas. Choosing the strike price so that the two premiums are equal removes any premium payment. Depending on where the barrier sits, it can be better or worse than an ordinary forward. In one set of conditions, a barrier at 160 yen is better and a barrier at 140 yen is worse.
Consider a hypothetical example in which an importer buys USD 1 million in 6 months. It locks in 143.2 yen per dollar, better than the ordinary forward rate of 147.4 yen, with the barrier at 160 yen. If the barrier is not touched, it buys for 143.2 million yen, 4.2 million yen better than the ordinary forward. If 160 yen is touched, the transaction is cancelled, and if the rate at maturity is 165 yen, the importer pays 165 million yen in the spot market.
After the barrier is touched, the importer can no longer buy at the forward rate and may need to hedge again. If the barrier is not touched, the obligation to buy at the set rate remains even when the rate falls.