Santander analysts said that Japanese government pension investment funds can sell up to 62 billion US dollars of US Treasury bonds without formally adjusting asset allocation policies. GPIF's management team held an unusual meeting last month. The market speculates that this $2 trillion investment institution with asset management is considering reducing the allocation of foreign bonds and increasing the share of domestic Japanese bonds. Japan's Minister of Health, Labor, and Welfare Kenichiro Ueno, who oversees the fund, said on Tuesday that officials are still considering whether it is necessary to review asset allocation. However, Santander's Antonio Villarroya and others believe that even before the formal review, the current policy has given fund managers enough room to operate, which can significantly reduce exposure to overseas bonds, and US Treasury bonds face the greatest risk of holdings reduction. Villarroya and her team wrote in a report to clients: “Given the flexibility of the strategic allocation range, GPIF can begin reducing foreign bond holdings in the next few months without having to wait for a formal strategic asset allocation review.” They said that if the Bank of Japan successfully reverses the decline in yen through continuous interest rate hikes, this possibility will become even greater.

Santander analysts said that Japanese government pension investment funds can sell up to 62 billion US dollars of US Treasury bonds without formally adjusting asset allocation policies. GPIF's management team held an unusual meeting last month. The market speculates that this $2 trillion investment institution with asset management is considering reducing the allocation of foreign bonds and increasing the share of domestic Japanese bonds. Japan's Minister of Health, Labor, and Welfare Kenichiro Ueno, who oversees the fund, said on Tuesday that officials are still considering whether it is necessary to review asset allocation. However, Santander's Antonio Villarroya and others believe that even before the formal review, the current policy has given fund managers enough room to operate, which can significantly reduce exposure to overseas bonds, and US Treasury bonds face the greatest risk of holdings reduction. Villarroya and her team wrote in a report to clients: “Given the flexibility of the strategic allocation range, GPIF can begin reducing foreign bond holdings in the next few months without having to wait for a formal strategic asset allocation review.” They said that if the Bank of Japan successfully reverses the decline in yen through continuous interest rate hikes, this possibility will become even greater.