Posting this info ICYMI. That Japan’s $1.7 trillion Government Pension Investment Fund (GPIF) has raised its holdings of U.S. Treasuries to the highest level in a decade
- driven by rising U.S. yields and a stronger dollar against the yen
- As of March, U.S. Treasuries accounted for 51.8% of GPIF’s foreign bond portfolio, the highest since tracking began in 2015
The move was supported by the wide interest rate gap between the U.S. and Japan, which lifted returns on U.S. assets as the dollar-yen exchange rate surged to near 40-year highs. Nomura’s Naokazu Koshimizu said the current conditions make unhedged U.S. Treasury investments attractive for Japanese investors.
The GPIF boosted its U.S. exposure before the U.S. announced sweeping tariffs, which had initially raised concerns about American assets. Since then, Treasury returns have steadied and the dollar has softened slightly. Koshimizu expects stronger demand for Treasuries from Japanese institutions once the Federal Reserve begins cutting rates.
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