Published at 02:27 (GMT) 28 Mar
PM Shinzo Abe says rethinking GPIF portfolio part of investment improvements. Important for Japan to limit risk of long-term Japan yields jump. Will do everything to ensure bond market stability. To keep working on maintaining trust in Japan bonds/ JGBs.
On FX, more pressure from PM Abe on the mammoth GPIF to be more aggressive in its portfolio allocation to enhance returns. Pressure to shift funds into more aggressive sectors - stocks and overseas assets? Could see new waves of GPIF, pension funds outflows in new FY14/15 from April 1 next week. As PM Shinzo Abe, government hope the shift for greater returns, will also help cushion the impact of the sales tax hike?
USD/JPY, Cross/JPY could see more upside on GPIF, pension funds, public funds, lifers demand for overseas assets. As markets continue to wait for signs of the expected "huge" portfolio shift/ capital flows upon "Abenomics". USD/JPY at 102.15-20, bids at 102 lows, weak stops above 102.30-35. More offers 102.40-50, stops above 102.55-60.
AUD/JPY up at 94.95-00, up from 94.60-65 earlier, at fresh 5-month highs. Capped by speculation of good options related sales ahead of 95.00 Option barriers. But stoploss building above 95.05-10. 2-way interest from Japanese banks and funds. But real interest to buy on dips for more upside. Eye 95.50/96.00. As USD/JPY eye 102.50. 103 options. WL
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