GPIF Hires Active Bond Managers, Yen Could Get Support
Japan’s Government Pension Investment Fund has hired active domestic bond managers for the first time in five years, a move BNY’s Geoff Yu says could lend support to the Japanese yen.
Geoff Yu of BNY notes that Japan’s Government Pension Investment Fund (GPIF) has onboarded active managers for its domestic bond portfolio, a step not taken in half a decade. The shift is meant to improve expertise and diversification as Japanese government bond (JGB) markets face heightened volatility.
Despite a strong overall performance, the fund’s domestic bond holdings have suffered losses. By turning to active management, GPIF aims to navigate the turbulent JGB environment and potentially stem those losses.
The change in the massive pension fund’s investment approach could trigger shifts in capital flows that prove supportive for the Japanese yen. As one of the world’s largest asset owners, GPIF’s allocation decisions are closely watched for their currency implications.
Source: FXStreet Forex News