Japan’s Nikkei Drops as Markets Await Key U.S. Inflation Data 
Spain’s Industrial Output Records Steady Growth in October Amid Revised September Figures 
Dollar Weakens Ahead of Expected Federal Reserve Rate Cut 
U.S. Futures Steady as Rate-Cut Bets Rise on Soft Labor Data 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
Asia’s IPO Market Set for Strong Growth as China and India Drive Investor Diversification 
Asian Currencies Steady as Rupee Hits Record Low Amid Fed Rate Cut Bets 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
Europe Confronts Rising Competitive Pressure as China Accelerates Export-Led Growth 
European Stocks Rise as Markets Await Key U.S. Inflation Data 
China Urged to Prioritize Economy Over Territorial Ambitions, Says Taiwan’s President Lai 
Asian Markets Mixed as Fed Rate Cut Bets Grow and Japan’s Nikkei Leads Gains 
Asian Markets Mixed as RBI Cuts Rates and BOJ Signals Possible Hike 
Citi Sets Bullish 2026 Target for STOXX 600 as Fiscal Support and Monetary Easing Boost Outlook 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
World’s biggest Pension fund, Japan’s GPIF could be in troubled water this year and that is due to its venture to riskier assets back in 2014, when Bank of Japan (BOJ), increased its monetary stimulus by another ¥10 trillion per annum. This year BOJ introduced further stimulatory measures such as introduction of negative rates, for first time in its history, but the reactions haven’t been as intended so far.
Nikkei’s underperformance:
- While S&P 500 recovered from its January, February losses and now positive for the year, Japan’s benchmark stock index, Nikkei 225 is still down about 9.5% for the year. Even some emerging markets like India is much better performer, which is down just -2.3% YTD.
GPIF asset shift –
- Back in December, 2013, approximately 62.5% of the assets were consisted of bonds, while little more than 15% were invested in international stocks and 17.2% in domestic stocks.
- By third quarter of 2015, GPIF’s holding of bonds were reduced by approx. 14%, while that part went into equities. Now about 46.1% of the total $1.2 trillion portfolio is invested in equities, of which 245 invested in home.
Troubles since last year:
- Since last quarter peak around 21000, Nikkei is down about 19%, while bonds have rallies sharply. Moreover if GPIF increased greater portion of its portfolio to European equities for its international position, then it must be sitting on another set of large loss. European blue chip index, EuroStxx50 is down more than -6% for the year and about -17% in last 12 months. Stronger Yen since last quarter likely to deteriorate this numbers.
While large portion of this is still will be paper loss, losses in whatever forms in a pension fund is likely to be very big issue for a country, with largest share of elderly in its population.
These paper losses pose big risks for Prime Minister Shinzo Abe, which is facing election in upper house in summer and GPIF will be announcing the quarterly result before that.
