Japan's Government Pension Investment Fund (GPIF) is to consider currency-hedged overseas bond holdings as similar to domestic debt investments
- In effect this is going to boost offshore bond holdings
- and, on the other hand, take some of their buying out of the Japanese domestic bond market
The removal of some buying from the JGB market will be a boost for the BOJ seeking a steeper yield curve (at the margin and at if growth and inflation languish it might not amount to much).
(Mechanism is: less buying --> price should fall --> and given inverse relationship yield should rise).
