Pensions and FX
Japan’s public pension funds have been under the microscope ever since a government-sponsored committee was set up in July to review how the industry operates. The committee’s final report is due this week, according to press reports. This explains some (but by no means all) of the yen weakness we have seen in recent days. Yen bears hope that the committee will recommend a more riskseeking posture for the industry as a whole, which could eventually trigger an orderly move out of JGBs and deeper into equities or foreign bonds.
Read the full report: UBS