News Column

Yen Slides Amid Reports On Japan GPIF Stock Allocation Plan

August 7, 2014

OTTAWA (Alliance News) - The Japanese yen fell against the other major currencies in late Asian deals on Thursday amid reports that Japan'sGovernment Pension Investment Fund may increase its allocation of funds in domestic stocks to over 20%, up from current 12% target.

According to reports, GPIF will likely cut its holdings in Japanese government bonds to around 40% from a current 60% target, while raising the investment in global stocks. The new allocation plan, which is expected to provide higher returns, is to be unveiled around the autumn.

The Bank of Japan starts a two-day policy meeting today. The central bank is not expected to alter its current monetary policy, under which it will expand its monetary base by 60-70 trillion yen per year.

The yen declined to 102.45 against the US dollar and 137.11 against the euro, compared to Wednesday's closing values of 102.08 and 136.60, respectively. On the downside, the yen may find support around 104.00 against the greenback and 138.00 against the euro.

The Japanese currency weakened to 112.83 against the Swiss franc and 172.60 against the pound, which may be compared to yesterday's closing quotes of 112.46 and 172.01, respectively. The yen is likely to face support around 113.5 against the franc and 173.5 against the pound.

The yen hit 93.82 against the loonie, a 2-day low, from 93.50 hit at yesterday's close. The next downside target for the yen lies around the 94.5 mark.

The yen that closed deals at 86.51 yesterday ticked down to 86.68 against the NZ dollar. The yen may possibly face support around the 87.00 region.

House prices in New Zealand increased at a slower rate in July, data from Quotable Value, or QV, showed.

The QV residential price movement index grew 7.6% year-over-year in July. This follows the 8% rise in June.

At 7:00 am ET, the Bank of England will announce decision on interest rates. The central bank is seen keeping rates on hold at 0.50% and asset purchase target at 375 billion pounds.

The European Central Bank is set to announce interest rate decision at 7:45 am ET. The refinancing rate is expected to be maintained at 0.15%.

The US weekly jobless claims for the week ended August 2, Canada building permits for June and Ivey PMI for July are due in the New York session.

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Source: Alliance News

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