USD/JPY Near 109.40 on Report GPIF to Boost Foreign Securities

The yen traded near a six-year low against the dollar after a media report spurred speculation the world’s biggest pool of retirement savings will increase its holdings of securities outside Japan.

The nation’s $1.2 trillion Government Pension Investment Fund will boost foreign investments to 40 percent of its holdings from 23 percent, the Nikkei newspaper said. That’s higher than the 29 percent forecast in a Bloomberg News survey of analysts. The dollar touched a three-week high against its major counterparts yesterday as the U.S. economy expanded more than forecast in the third quarter.

“The total allocation to foreign stocks and bonds would be about 40 percent of the total, which is a great deal higher than the market has been expecting.” said Yujiro Goto, a currency strategist in London at Nomura Holdings Inc. “We’ll have to wait to see if the Nikkei report is true, but for now the market has taken it as a cue to sell the yen.”


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