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"GPIF To The Rescue?" Yen Jumps After Japan Urges Pension Funds To Invest More At Home

Zero Rss
1 month 1 week ago
"GPIF To The Rescue?" Yen Jumps After Japan Urges Pension Funds To Invest More At Home

After a relentless collapse in the yen to a 40 year lows, the trajectory was finally dented overnight when Japan’s finance minister called for the nation’s massive pension funds to increase investments in domestic assets, boosting the yen from near four-decade lows and spurring a rally in bonds.

“One priority is to encourage households, as well as pension funds including the GPIF, to increase their investment in Japanese financial assets. We intend to pursue policies that support that objective,” Finance Minister Satsuki Katayama said Friday, referring to the Government Pension Investment Fund. It’s one of the world’s largest pensions with ¥293.6 trillion ($1.81 trillion) in assets.

The remarks in response to a question at a regular press briefing about government investment plans caught markets off guard, leading to a jump in the yen and a drop in bond yields. Both assets had been under considerable stress this week.

According to Bloomberg, Katayama’s comments on the GPIF were prepared in advance, citing a person familiar with the matter said. It’s unclear if they were intended to be form of verbal intervention, although they certainly impacted the yen more than the recent BoJ rate hike or ongoing currency jawboning.

Japan's giant GPIF pension fund is overseen by the labor ministry, not finance, and any changes to its investment strategy would have to go through an established process that would take time to implement. If any changes to allocations were to occur, the implications could spread beyond Japan. The nation is the largest foreign holder of US Treasuries with a $1.2 trillion stockpile, and almost $5 trillion of the country’s capital is deployed overseas.

Ironically, over the past decade, the big push domestically was for the GPIF to invest more abroad, especially in US equities, at a time when Japanese stocks languished for year after year. However, with the Nikkei now significantly outperforming the S&P, it is hardly a surprise that local authorities are pushing for another reallocation, this time from abroad back to home.

Katayama’s comments were in response to a question on how the government’s plan to increase investment in strategic areas, such as artificial intelligence, would benefit its people. Prime Minister Sanae Takaichi unveiled a plan last month for ¥370 trillion to be invested in the economy over the course of 14 years, with more than a quarter of it earmarked for AI and chips alone.

“We want to ensure that the public can directly benefit from Japan’s economic growth,” Katayama said.

The Takaichi administration is a well-known proponent of accommodative monetary policy. An early draft of its economic policy guidelines released last month fanned market worries that the government is trying to exert influence over the BOJ, prompting several revisions to tame concerns. Katayama also said on Friday that monetary policy should be handled by the BOJ.

The call to reallocate investments signals the government’s intention to channel more household and institutional savings into domestic assets as the nation enters a new phase of economic growth accompanied by positive interest rates. Japanese equities have performed strongly this year, with the Nikkei 225 recently climbing above the 70,000 mark for the first time.

While it’s not clear how seriously the government is considering the issue, a reallocation of funds toward domestic investment would be a boost for the yen near 40-year lows. Besides rate-differentials with the US that have weighed on the currency, the yen has also been under pressure from capital outflows and concerns about the Bank of Japan’s independence. 

In immediate response to the comments, the yen strengthened to as firm as 161.29 per dollar before paring some gains. Bonds rallied, with yields across the curve declining about 10 basis points.

GPIF’s potential changes “cannot be ignored” given the size of its assets under management, said Yugo Tsuboi, chief strategist at Daiwa Securities. Katayama’s comments “could help sustain a ‘triple rally’ of bonds, the yen and stocks in the Japanese market.”
Some market participants doubted whether the comments will lead to any changes in asset allocation.

However, some traders doubt whether the comments will lead to any changes in asset allocation.

In a note from Goldman's FX team titled "The Scope for Japanese Repatriation Flows" (available to pro subs), the bank cautions that the comments do not signal an actual shift in government policy. Their framing is that meaningful repatriation flows, if they occur, would be one of the more credible paths to the yen correcting its severe undervaluation - while noting investor anticipation of such flows has repeatedly picked up over the past year (e.g., after the snap election) without materializing.

"We have long been skeptical of the scope for significant JPY-positive repatriation flows without a more favorable rate differential, especially since GPIF also has a return target that it needs to achieve. But any meaningful reallocation back towards domestic assets should be a source of support for the Yen, in addition to any rise in recession risk or more aggressive BoJ hikes" wrote Goldman strategist Karen Reichgott Fishman

In a separate note titled "GPIF to the Rescue?", Goldman said that Katayama's remarks sparked a JGB reversal rally, with 5y+ JGBs richening 5–11.5bps, but here too the bank's stance was skeptical, calling the rally "an overreaction," and noting that the FinMin used the broad term "Japanese financial assets" and did not explicitly commit GPIF to buying JGBs in size. They maintain a structurally bearish bias on ultra-long JGBs ahead of 20y/40y supply, and don't see this as a structural turnaround. 

Others agreed: “The macroeconomic backdrop has not changed, so it is difficult to see the yen strengthening for long,” said Kazushige Kaida, head of FX sales at State Street Bank & Trust Co.’s Tokyo branch. “If the latest comments suggest that the government is simply looking for ways to ease the pain of its reflationary policy, rather than abandoning it, then the broader story of yen weakness remains intact.”

The GPIF sets asset allocation parameters every five years. In March 2025, the fund decided to keep splitting a quarter of its funds equally between domestic stocks and bonds, foreign equities and debt. The fund also cut the maximum deviation from the target to 5-6 percentage points depending on movements by the various asset classes, from 6-8 percentage points.

GPIF posted its third best annual return on record in the 12 months ended March 31, according to a statement earlier this month. About half of the fund’s assets are invested overseas. The combined assets under management of Japan’s four public pension funds, led by GPIF, total about ¥332 trillion.

A shift “toward Japanese financial assets would be positive for Japanese equities,” said Yukihiro Kawanishi, a senior strategist at Aizawa Securities. “It could also encourage overseas investors, who have already moved ahead of the trend, to increase their allocations.”

Tyler Durden Fri, 07/10/2026 - 09:40
Tyler Durden

JPMorgan Says The Real Threat To Bitcoin Isn't Strategy (MSTR), It's Private Blockchains

Zero Rss
1 month 1 week ago
JPMorgan Says The Real Threat To Bitcoin Isn't Strategy (MSTR), It's Private Blockchains

Authored by Micah Zimmerman via BitcoinMagazine.com,

Strategy’s recent bitcoin sales and its formal monetization program have rattled investors, but JPMorgan analysts see a bigger danger to bitcoin: blockchain adoption that routes around public networks and the tokens that ride on them.

In a report led by managing director Nikolaos Panigirtzoglou (ZH: available here for professional subscribers), the bank argued that Strategy is not the main structural threat to the asset. 

The company sold 3,588 bitcoin for $216 million in early July to cover preferred dividends, its largest disposal on record, and such sales can add bursts of selling pressure. The deeper concern, the analysts said, is where tokenization, payments and settlement end up.

Should that activity settle on permissioned rails rather than public chains, the crypto ecosystem could face a structural de-rating — thinner liquidity, weaker capital flows and slower on-chain volume — a drag that would reach bitcoin in time.

Institutions have leaned toward permissioned blockchains, which offer privacy, know-your-customer and anti-money-laundering controls, governance, throughput, legal accountability and regulatory certainty. 

That preference, per JPMorgan, creates a competitive problem for public networks like Ethereum.

The analysts cited the Bank for International Settlements, which has warned against public permissionless chains for systemic financial infrastructure and has pushed instead for “unified ledgers” that hold tokenized central bank money, bank deposits and assets inside regulated walls.

Tokenization as a real-world use case

Banks are building to that spec. Tokenized deposits — digital claims on bank balances, backed by banking regulation and deposit insurance — stand out as the clearest case. Should such deposits spread in the non-transferable forms regulators favor, they could crowd out stablecoins in institutional payments. 

SWIFT’s blockchain project and central bank digital currency efforts such as the digital euro and digital yuan would reinforce that regulated lane.

Real-world asset tokenization tells a similar story. The market sits near $50 billion, much of it on Ethereum for now, though the analysts read that as early experimentation rather than a settled structure. 

As adoption matures, issuance, custody and settlement could migrate to private infrastructure, leaving public chains for distribution and interoperability. DTCC and Securitize show the pattern in motion, and the analysts questioned whether public settlement is even the most efficient model for regulated firms, given the capital savings of deferred, netted settlement.

What could prove JPMorgan wrong

The Clarity Act, even should it pass this year, might not lift the threat; it could embolden bank-issued deposit tokens at the expense of public stablecoins. 

The analysts flagged three ways their thesis breaks: a hybrid model where both chain types matter, stronger stablecoin adoption under friendly rules, or bitcoin holding its role as “digital gold” and a debasement hedge whatever happens across the rest of crypto.

JPMorgan's full report is available here for pro subs...

Tyler Durden Fri, 07/10/2026 - 09:25
Tyler Durden

Trump Took Old Air Force One To Leave Turkey As Security Measure: White House

Zero Rss
1 month 1 week ago
Trump Took Old Air Force One To Leave Turkey As Security Measure: White House

Authored by Timothy Frudd via The Epoch Times,

The White House said Thursday that President Donald Trump’s departure from the NATO summit in Turkey aboard the old Air Force One was a “distraction and misdirection” intended to address threats against him.

The decision to have Trump travel aboard the old Air Force One aircraft came after Trump said he was at the top of Iran’s kill list following renewed conflict between the United States and Iran. The transportation swap took place just one week after the president took his first flight on the new Air Force One.

“As the President has said recently, there are many enemies of America who have their sights on him, and we use every tool at our disposal—including distraction and misdirection—to address those threats,” White House communications director Steven Cheung said in a statement.

Cheung defended the security capabilities of the new Air Force One, a $400 million Boeing 747-8 luxury jet that was gifted to the federal government by the Qatari government last year, after reports suggested that the Secret Service advised the president to take the old Air Force One on Wednesday.

“The new Air Force One is a state-of-the-art aircraft that has been fitted with high-level security protocols that ensure the safety of the President and his staff,” Cheung said.

In a social media post on Thursday, Trump said the new Air Force One was being sent to Mildenhall Air Force Base in the United Kingdom to give U.S. military members an opportunity to tour the aircraft.

“For old time’s sake, we’ll be taking the former Air Force One, from Turkey to Mildenhall, a short trip that is totally worth doing in order to give our Great Military Heroes a chance to appreciate our beautiful new addition to the Air Force Fleet!” Trump said.

In another social media post on July 8, Trump confirmed that he had landed at Mildenhall Air Force Base and met up with the new aircraft. He said the flight to the base represented “virtually no deviation” from the flight path back to the United States following his trip to the NATO summit.

Trump later departed from Mildenhall Air Force Base for his return trip to the United States aboard the new Air Force One.

During a news conference at the NATO summit on Wednesday, Trump discussed the threat posed against his life by Iran following U.S. retaliatory strikes against the country after it fired missiles at commercial ships in the Straight of Hormuz earlier this week. “I’m number one on the kill list for Iran,” Trump said.

Trump also said the temporary ceasefire deal with Iran was over on Wednesday after the United States and Iran exchanged strikes on Tuesday.

“To me, I think it’s over. I don’t want to deal with them anymore. They’re scum,” Trump said, later adding, “As far as I’m concerned, it’s just a waste of time dealing with them.”

The Epoch Times has reached out to the White House and has not received a response before publication time.

Renewed Conflict With Iran

The U.S. military launched precision strikes against more than 80 Iranian targets on Tuesday in response to what it said was a “clear and dangerous violation of the ceasefire” by Iran. The strikes came after Iran attacked three commercial tankers in the Strait of Hormuz.

On Wednesday, the Islamic Revolutionary Guard Corps said it carried out a joint missile and drone operation against key U.S. military sites in Bandar Salman, Bahrain’s Fifth Naval District, and Ali Al Salem Air Base in Kuwait. Iran also said it shot down a U.S. MQ9 drone that attempted to interfere with the operation.

U.S. Central Command said Wednesday that U.S. forces completed another round of strikes against Iran, hitting about 90 military targets, including air defense systems, missile and drone storage sites, naval capabilities, coastal surveillance assets, and military logistics infrastructure.

“The United States is holding Iran accountable for recent unjustified aggression against commercial shipping and civilian crews freely navigating a vital international waterway,” U.S. Central Command said.

Tyler Durden Fri, 07/10/2026 - 08:45
Tyler Durden

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