Japan is promoting more long-term investments in indigenous financial assets. In the view of external sources, if this direction continues, it may increase the attractiveness of scarce assets, such as bitcoin and gold, in the medium to long term, but may also cause volatility in global markets in the short term.
The GPIF is supposed to add to Japanese assets.
The Minister of Finance of Japan, Kazuo Yamaki, stated that the Government was actively leading the Japanese Government ' s Pension Investment Fund (GPIF) to increase the allocation of domestic financial assets, including Japanese national debt. The GPIF is about $2 trillion, one of the largest pension funds in the world.
At the time of this statement, Japan's public debt as a share of GDP had exceeded 200 per cent, bond yields had risen to about 30 years' high and the yen had been under pressure. At the same time, the Government of Japan wishes to promote the transfer of resident assets from cash and deposits to financial products such as stocks, funds and bonds.
Actual rate of return or continued pressure by external media
According to the review, such practices are in line with the policy approach of “leading domestic savings to support domestic financing”. At the heart of this is the need to make local long-term finance more available for national debt and local assets, thereby easing the financial pressure and limiting the rate of return to go too fast.
If the nominal rate of return is long below inflation, the real return on fixed-income assets will be reduced. In such an environment, the availability of assets that are limited and considered to be reservable is often more likely to receive attention. According to the article, bitcoin and gold could benefit from it.
Short-term or disturbing United States debt and risk assets
However, the article also suggests short-term risks. The GPF currently holds approximately $931.1 billion in overseas assets, including approximately $232.1 billion in United States Treasury debt. If part of the money goes back to the local market in Japan, Wall Street may be volatile and risk preferences may be phased out.
Such changes could affect not only bonds and exchange rates, but also stocks and encrypted assets. In other words, the long-term logic favours the scarce assets of Lido, but the market is not necessarily linear in the process of reallocating funds.
On the whole, bitcoin was still above $64,000. The article mentions that if prices continue to improve, the market will then focus on the technical resistance levels above $654 million, $673 million and $74,000.