August 10, 2022

Japan’s authorities pension fund, the world’s largest, suffered its worst quarter in two years because the downturn in world inventory markets within the three months to June eroded its asset values.

The Tokyo State Pension Funding Fund mentioned Friday that it misplaced 1.9% or 3.75 trillion yen ($28 billion) within the second quarter, chopping its complete belongings to 193.01 trillion yen. The worth of its Japanese shares fell by 3.7% over the identical interval, whereas the worth of overseas shares it acquired fell by 5.4%. Home debt fell 1.3% and overseas bonds rose 2.7% on the greenback’s positive factors of about 12% in opposition to the yen.

Since virtually half of its belongings are overseas investments; The speedy depreciation of the yen in opposition to the greenback since March helped cushion the fund’s losses for 2 straight quarters. The earlier loss between January and March was the primary loss underneath Masataka Miyazono, who took the lead within the fund in April 2020 following the pandemic-driven world inventory market turmoil.

Miyazono mentioned in a press release: “Main inventory indices declined regionally and globally amid fears of an financial slowdown because of financial tightening as main central banks all over the world increase rates of interest or reverse financial easing to comprise escalation. inflation.”

Between April and June, the MSCI International Index and S&P 500 fell 16%, whereas the Topix fell 3.9%. Yields on 10-year US Treasury bonds rose 67 foundation factors over the interval, whereas yields on benchmark Japanese authorities bonds remained just about unchanged.

“As a result of 50% of the fund’s portfolio is equities and 50% foreign money, Takafumi Yamawaki, head of native foreign money pricing and analysis at JPMorgan Securities Japan Co. Its returns will fluctuate considerably relying on the conduct of the markets.”

The Japanese pension fund’s loss was the most important for the reason that first quarter of 2020, when world inventory market losses worn out a file $165 billion in fund belongings.

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