The MUFG Global Markets Podcast
Jul 10, 2026 · 20 min · 7 segments
Derek Halpenny, Head of Research Global Markets EMEA & International Securities sits down to speak with James Roulston in FX Institutional Sales to discuss the latest FX/Rates themes. Derek discusses…
Derek HalpennyHost
James RoulstonHost
I would definitely class the comment as very significant from a policy perspective.
The N has weakened back a little bit, but I think it's still the top performing G10 currency today.
And James, the significance is not necessarily what happens over the short term, because I don't think it necessarily will have much impact.
But I think if you look at the bigger picture, like if we go back to Abenomics, and the whole launch of Abenomics when Prime Minister Abe came to power.
And one of the things he did was he kind of launched a review of pension investments.
And one of the logics here was as part of the whole reflation idea in relation to its general policy under Abenomics,
Getting
better returns on pension investments would feed through into better confidence in the Japanese pension system, and that would in turn reduce the appetite for portionary savings amongst Japanese households, resulting in better spending at home.
And the consequence of that review was that given Japan was entering back into inflation after decades of mild deflation, the holdings of domestic bonds was too high.
And ultimately leading from that was the first big reallocation of changes in relation to GPIF, the Government Pension Investment Fund, where at that point in time, the domestic bond holding was at 60%.
And then again, in 2020, the domestic bond holding was reduced further from 35% to 25%.
So really, you know, since Abe came to power, up until this point in time, there has been this focus on investing in higher yielding foreign securities.
I would definitely class the comment as very significant from a policy perspective.
The N has weakened back a little bit, but I think it's still the top performing G10 currency today.
And James, the significance is not necessarily what happens over the short term, because I don't think it necessarily will have much impact.
But I think if you look at the bigger picture, like if we go back to Abenomics, and the whole launch of Abenomics when Prime Minister Abe came to power.
And one of the things he did was he kind of launched a review of pension investments.
And one of the logics here was as part of the whole reflation idea in relation to its general policy under Abenomics,
Getting
better returns on pension investments would feed through into better confidence in the Japanese pension system, and that would in turn reduce the appetite for portionary savings amongst Japanese households, resulting in better spending at home.
And the consequence of that review was that given Japan was entering back into inflation after decades of mild deflation, the holdings of domestic bonds was too high.
And ultimately leading from that was the first big reallocation of changes in relation to GPIF, the Government Pension Investment Fund, where at that point in time, the domestic bond holding was at 60%.
And then again, in 2020, the domestic bond holding was reduced further from 35% to 25%.
So really, you know, since Abe came to power, up until this point in time, there has been this focus on investing in higher yielding foreign securities.
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