One look at the 5%+ plunge in the Nikkei overnight and one would be allowed to wonder if this was it for Abenomics: with a 15% drop from recent highs, and the TOPIX Real Estate index down by more than 20%+ since mid-April, entering a bear market, what’s worse is that even the “wealth effect” Mrs Watanabe fanatics would be excused from having much hope going forward. The problem, however, is that in a world in which only the USDJPY matters as a risk signal, and only the stock market remains as a last bastion of “hope”, the overnight weakness pushing the dollar yen to just 50 pips above 100 threatened to crush the manipulated rally and force everyone to doubt the sustainability of central planning. So, sure enough, literally seconds we got the much needed stick save without which everything could have come tumbling down, namely based on an unsourced article out of Reuters that Japan’s Public Pension Fund is considering a change to its portfolio strategy that could allow domestic equity share of investments to rise in rallying market.
In other words, just like every other insolvent country, the pension fund is the last bastion of preserving the rally, when even the central bank fails. How pensioners will feel about losing their retirement money much faster than usual remains to be seen. What was notable is that Reuters, so well known for spreading disinformation during the European “headline” war, appears to be back to its old tricks:
The sources, who declined to be identified because they were not authorised to discuss the pending changes, said the fund is expected to announce the changes as soon as next month.
An official at GPIF declined to comment on the matter.