Japanese Finance Minister Katayama urges GPIF to increase domestic asset allocation, leading to a rise in the yen's exchange rate.

Japanese Finance Minister Katayama has called on GPIF and other pension funds to increase their allocation to domestic assets so that the public can benefit from Japan's economic growth. As a result, the yen strengthened and USD/JPY hit an intraday low of 161.28, down 0.67%; the Nikkei 225 index rose as much as 2.4%; yields on the 10-year and 20-year JGBs both fell about 10 basis points during the session. Daiwa Securities believes that the potential asset reallocation by GPIF is meaningful for the market. Lanze Securities pointed out that if GPIF, which manages about 300 trillion yen in assets, shifts towards Japanese financial assets, it will be positive for domestic stocks. Crédit Agricole believes that Katayama prefers structural measures rather than direct foreign exchange intervention. Sumitomo Mitsui DS Asset Management stated that reducing exposure to foreign assets will alleviate the depreciation of the yen. Robeco expects this move to have a net positive impact on the yen and local assets.