The yen fell against all its 16 major peers after a report detailing changes to Japan’s $1.2 trillion retirement fund boosted speculation the reallocation flows are near at hand, damping demand for the local currency.
The yen declined for a third day after the Nikkei newspaper said, without attribution, that the Government Pension Investment Fund will boost its target for foreign debt and equities to about a combined 30 percent from 23 percent and increase domestic shares to about 25 percent from 12 percent. Australia’s dollar rose after a Chinese government official said the central bank is planning to inject funds into some lenders, a sign the Asian nation is stepping up stimulus measures.
“The fact that they’ve put numbers on the reallocation implies that they’re closer to implementing it and the flows actually occurring,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland, referring to GPIF. “Markets will be looking at those flows as supportive for equity markets and outflows from Japan, which would both be negative for the yen based on current correlations.”
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