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2026-07-14 15:14:13
[Yen Strengthens Slightly, Market Focuses on GPIF Allocation Adjustment Signals] 1. The yen strengthened slightly during Tuesday's Asian session, with the USD/JPY pair falling as much as 0.12% to 162.23, but still not far from its 40-year high. The market remains wary of potential further intervention by Japanese authorities. 2. Japanese Finance Minister Satsuki Katayama stated on Tuesday that the government might consider adjusting the asset allocation of the Government Pension Investment Fund (GPIF) should the asset management environment change drastically. Health Minister Kenichiro Ueno also stated at a separate press conference that adjustments to the GPIF allocation would be studied if necessary, but a short-term adjustment is unlikely. 3. Masafumi Yamamoto, chief foreign exchange strategist at Mizuho Securities, pointed out that for the yen buying momentum from GPIF allocation adjustments to be sustained, the authorities need to make a swift decision, and the allocation ratios of domestic stocks and bonds need to each increase by at least 5 percentage points. If the adjustment is very limited, or the decision-making process is delayed too long, any additional yen buying will be very limited. 4. The GPIF manages over $1.5 trillion in assets, with approximately 50% currently invested in overseas assets. The Japanese government's previous statement indicating its intention to explore ways to encourage pension funds to increase their holdings of domestic assets briefly strengthened the yen, but the lack of concrete details prevented the rally from lasting. The market is closely watching whether the authorities will release a more actionable plan in the near future.
