Earlier today, traders received Japan’s producer price index for June, which was 7.1%, the fastest annual increase since March 2023. Rising wholesale inflation reinforced expectations for further rate hikes from the Bank of Japan. A former central bank official said Thursday that the BOJ could raise rates faster, potentially taking them above 2%.
Note that the Japanese yen and Bitcoin have developed an unusually strong positive correlation, often moving at the same pace against the US dollar. If that correlation holds, rallies in the yen may ultimately prove positive for bitcoin overall, even as BTC/JPY pairs (and other crypto/JPY pairs) continue to lag in relative terms.
The risk of GPIF
Japan’s Government Pension Investment Fund (GPIF) manages approximately 277 trillion yen ($1.87 trillion) in assets, making it the largest retirement fund in the world. Invest heavily in global stocks and bonds.
Now the Japanese government wants the GPIF and other pension funds to invest more in local assets. Such a rotation could trigger volatility in global financial markets.
“The fund, one of the world’s largest pension funds, had 293.4 trillion yen, or about $1.81 trillion, in assets at the end of December, maintaining roughly equal allocations between domestic stocks, foreign stocks, domestic bonds and foreign bonds,” InvestingLive analysts said in a market update.
