Thanks to Thelma for the story from Bloomberg that cites Nomura Holdings Inc expecting the massive $1.3tn pension fund to go on a $200bn spending spree for foreign assets.
If they do then Nomura says we could see a 10 yen fall in the currency over the next 12-18 months. Mitsubishi UFJ Morgan Stanley see an 8 yen slide as the GPIF and other large pension funds sell domestic and buy abroad.
The noises from Abe and his plans for getting the pension funds into higher risk assets is starting to gather pace. It’s a similar scenario to Abe and his virtual takeover of the BOJ. If he gets his way the GPIF monster may finally start to stir and that would likely be the kicker for the next big leg up in stock, bond markets and USD/JPY. The problem is that Abe needs to turn around a Japanese mindset on investing that has existed for years and that is a battle in itself. Getting his men at the helm will be a good starting point
I have been looking to buy USD/JPY anywhere near 100 but this news might have me scaling in earlier as it potentially adds to the supportive picture of the pair overall.
One to watch in the weeks ahead.
