Thanks to Chris for the link to this morning’s Australian newspaper and it’s story on the expected sell-off of assets by Japan’s huge Government pension investment fund.
Obviously the effect of these sell-offs will depend to a large degree on what assets are sold and whether they are on-shore or off-shore, but one would have to think that uncertainty and imbalance are the most obvious short term effects, neither of which will be good for the Nikkei. A lower Nikkei may initially encourage selling of USD/JPY and the JPY crosses but ultimately one would expect fundamentals to finally start playing a role and for the JPY to weaken.
