From the AFR:
Japan’s $1.26 trillion Government Pension and Investment Fund this week announced changes to its investment committee that would fast-track plans to shift money out of Japanese government bonds (JGBs) into equities and foreign bonds.
…GPIF, which is roughly equal in value to Australia’s institutionally managed superannuation assets, holds more than half its assets in ultra-low yielding JGBs but could reduce its holdings by 15 to 20 per cent to move into stocks and foreign bonds, with about $60 billion expected to flow into the latter as early as June.
“It’s massive,” Nomura interest rate strategist Martin Whetton said.
“If they are to shift a small portion of what they manage out of Japanese bonds, it would go into foreign bonds and Japanese equities. The potential release of these flows is significant.”
…Mr Whetton said Japanese investors and Asian investors were already increasing their holdings of Australian dollar assets – a key factor behind the currency’s recent appreciation.
“They’ve been almost exclusively the reason for the upward pressure.”…
Err, the huge short covering in global leveraged players might have something to with it as well, as the commitment of traders reports has clearly shown, but point taken about Japanese enthusiasm.
