26 Sep 2013
Yen moves go viral, Japan's pension fund re-balancing weighs
FXstreet.com (Barcelona) - What it started as a tepid headline by Kyodo that Japanese authorities are close to considering a cut in corporate tax rate - nothing new -, has turned into a self-fulfilling prophecy to buy the screen on the Nikkei and Yen crosses.
However, another story having an impact on the Yen's rapid decline is about the long-awaited proposal by Takatoshi Ito, chairman of Japan's public pension fund reform council, shifting from JGB to risky assets including foreign securities in public pension funds.
As WSJ reports: "Japan's $1.16 trillion national pension fund, the world's largest, announced a long-awaited change to its holdings...The changes mark the first rebalancing by the fund since 2005 and will raise their allocation of domestic stocks to 12% from 11%. Foreign stockholdings will also increase to 12% from 9%, while foreign bonds will rise to 11% from 8%. Domestic bonds, composed primarily of JGBs, will be reduced to 60% from 67%. The remaining 5% is in cash or short-term assets."
However, another story having an impact on the Yen's rapid decline is about the long-awaited proposal by Takatoshi Ito, chairman of Japan's public pension fund reform council, shifting from JGB to risky assets including foreign securities in public pension funds.
As WSJ reports: "Japan's $1.16 trillion national pension fund, the world's largest, announced a long-awaited change to its holdings...The changes mark the first rebalancing by the fund since 2005 and will raise their allocation of domestic stocks to 12% from 11%. Foreign stockholdings will also increase to 12% from 9%, while foreign bonds will rise to 11% from 8%. Domestic bonds, composed primarily of JGBs, will be reduced to 60% from 67%. The remaining 5% is in cash or short-term assets."