THE JAPANESE YEN BOUNCED BACK COMPLETELY, AND THE GPS ADJUSTED THE SUSPICIONS

THE YEN REBOUNDED AFTER A SPEECH BY THE JAPANESE MINISTER OF FINANCE, KOYAMA, BUT HAS NOW RETURNED COMPLETELY, WITH THE DOLLAR TO THE JAPANESE YEN (USD/JPY) RETURNING TO MORE THAN 162, ALMOST RESTORING ALL THE INCREASES LOST BY THE GOVERNMENT PENSION INVESTMENT FUND (GPIF), WHICH FOR THE FIRST TIME REFERRED TO ENCOURAGING THE GOVERNMENT TO INCREASE THE ALLOCATION OF DOMESTIC ASSETS. THE ANALYSIS INDICATES THAT THE BASIC ASSET ALLOCATION FRAMEWORK OF THE GPF HAS NOT CHANGED IN PRACTICE AND THAT MARKET SENSITIVITY TO FUTURE POLICY SIGNALS IS LIKELY TO PERSIST, ESPECIALLY IN THE CONTEXT OF A WEAK YEN THIS WEEK, WHERE ENERGY PRICE INCREASES AND THE STRENGTHENING OF THE UNITED STATES DOLLAR HAVE ALSO PUT PRESSURE ON THE YEN. THE TOTAL INVESTMENT PORTFOLIO OF THE GPF AT THE END OF THE 2025 FISCAL YEAR WAS APPROXIMATELY 293.6 TRILLION YEN (APPROXIMATELY $1.8 TRILLION), AND EVEN A SINGLE PERCENTAGE POINT ALLOCATION CHANGE WOULD RESULT IN AN INFLOW OF NEARLY 3 TRILLION YEN. ALTHOUGH THE MARKET HAD BEEN OPTIMISTIC ABOUT MOUNTAIN RHETORIC, THE CURRENT RESPONSE HAD SHIFTED TO A MORE CAUTIOUS INTERPRETATION。