Three of the ten members appointed to the panel that oversee the $1.26 trillion Japanese pension fund GPIF will not have their terms renewed according to sources on Reuters. It’s the world’s largest pension fund.
Two of the three members were said to have shown much caution over Abenomics. One, Seki Obata, wrote a book titled “Reflation is Dangerous” and another, Takeshige Komoda, represents large labour unions that are interested in protecting their pensions.
One part of Abenomics has been trying to get the worlds largest pension fund to invest in riskier assets and away from the safer investment strategy of JGB’s. It’s something he has been pushing for quite sometime and this is potentially big news for seeing that happen. Members of the board are selected by the government so we’re likely to see replacements that will side with Abe’s strategy.
The GPIF is one big monster and though it’s made some noises about switching investments it’s not really conformed to Abe’s plan to invest in more risk. If it does start to really change tack then Japanese stocks are going to fly. If it starts going overseas for risk also then that’s going to see the yen take another major downward leg.
This news twinned with a Reuters report that Japanese companies were not seeing many adverse effects on sales early on after the tax hike, is very bullish news for Japan. It’s going to make dip buying USD/JPY more prevalent now. I’m a buyer down towards 100 but I might start scaling in earlier for the long term and will be interested in any dips to the mid 101’s and lower.
