Japan Government Appears to Encourage Rotation Into Yen Assets, RBC Says

According to Jin10, Abbas Keshvani, head of Asia macro strategy at Royal Bank of Canada, said the Japanese government appears to be encouraging investors to rotate into yen assets. He added that the prime minister and finance minister have recently hinted at a plan to encourage asset rotation into yen assets. Keshvani said Japan’s Government Pension Investment Fund currently allocates 26.9% of its portfolio to local bonds, with a maximum allocation of 31% allowed under its existing target. He said a potential 4.1 percentage-point allocation to domestic bonds would amount to 12 trillion yen, or $75 billion, in inflows. He added that if GPIF actively changed its asset allocation target to buy more Japanese government bonds, it would lead to more inflows.