JAPAN: Japan Assets Rally As FinMin Aims To Encourage GPIF Inv In Local Assets
Japan assets have received a boost this morning post comments from the FinMin around encouraging investment in Japan assets by GPIF. Via BBG: "“One priority is to encourage households, as well as pension funds including the GPIF, to increase their investment in Japanese financial assets. We intend to pursue policies that support that objective,” Finance Minister Satsuki Katayama said, referring to the Government Pension Investment Fund." Adding, “We want to ensure that the public can directly benefit from Japan’s economic growth,” Katayama told reporters at a regular press conference on Friday." (also via BBG).
- The table below presents the asset allocation split for GPIF, as at end of Mar 2026. See this Hidden PDFfor more details from GPIF. GPIF runs a rough 25% allocation model to local stocks, bonds and overseas bonds and stocks. In USD terms, total assets are around $1.81trln.
- Given the size of the sums involved, any asset allocation shift away from overseas and back to local assets would clearly benefit local asset markets.
- Such shifts would take time, and more details are likely needed on any asset allocation shifts. Still, market participants could front run such moves. USD/JPY is near 161.50 in latest dealings up around 0.60% in yen terms. Local stocks are higher, led by the NKY 225, up around 2.3% (although tech led gains are evident elsewhere).
- This could also have an impact on the ever burgeoning "Carry-Trade", could this possibly be an official attempt to stop the constant selling of Yen to add to these positions ? A huge repatriation program would certainly impact these stretched trades and also have implications for Global risk.
- JGB yields are weaker, led by the back end. The 20yr is down 12bps to 3.77%., The 10yr off 10bps to 2.78%.
- BBG also notes J.P.Morgan work from earlier in the year on potential GPIF support for JGB issuance, see this link.
Source: GPIF
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JGBS AUCTION: PREVIEW - 30-Year JGB Auction Due
The Japanese Ministry of Finance (MoF) will today sell Y600bn of 30-Year JGBs. The MoF last sold 30-year debt on 14 May 2026. The auction drew cover of 3.4938x at an average yield of 3.842%, an average price of 98.02, a high yield of 3.858%, and a low price of 97.80, with 29.5739% of bids allotted at the high yield.
- Last month’s 30-year bond auction delivered a mixed result. The low price failed to meet dealer expectations of 97.85 (Bloomberg survey). However, the cover ratio increased to 3.4938x from 3.1150x. The auction tail also lengthened slightly to 0.22 from 0.18.
- This month’s 10-year JGB auction delivered mixed to solid results, with the low price beating expectations at 98.01, according to the Bloomberg dealer poll. However, the cover ratio decreased to 3.5200x from 3.9039x and the tail lengthened to 0.05 from 0.03. This performance came with an outright yield that was ~15bps above the level of last month's auction but ~15bps below its cycle high.
- Results are due at 0435 BST / 1235 JT.
CHINA: Key Local News Highlights - PPI Highest in 4-Years
Below is a selection of key recent onshore media highlights for China ICYMI :
Growth (Xinhua): China sees consumption recovery, robust growth in emerging industries
https://english.news.cn/20260609/0658ba9dcf2044be9b4761180657deec/c.html
Trade (Yicai): China’s Trade Beats Forecasts Again in May on Global AI Investment Boom
Economic Outlook (Yicai): Yicai Chief Economists Confidence Index Falls to 49.9 Amid Cautious Economic Outlook
China EU Relations (Global Times): China, EU to discuss establishing trade and investment consultation mechanism: source
https://www.globaltimes.cn/page/202606/1363052.shtml
China Brazil Relations (Global Times): China, Brazil commit to deepening financial cooperation
https://www.globaltimes.cn/page/202606/1363149.shtml
Trade (China Securities Network); Foreign trade grew by 15.3% in the first five months, showing a positive trend.
https://www.cs.com.cn/xwzx/01/2026/06/10/detail_2026061010017162.html
China's 15th Five-Year Plan (China Daily): Next leap for industrial system
https://www.chinadaily.com.cn/a/202606/10/WS6a289651a310d6866eb4d521.html
Trade (China Daily): Demand, policies fuel foreign trade
https://www.chinadaily.com.cn/a/202606/10/WS6a289d0aa310d6866eb4d54c.html
PPI (RTRS): China's May producer inflation highest in nearly 4 years, consumer prices also rise
PPI (CNBC): China May wholesale inflation hits near 4-year high on Iran war, AI costs; CPI misses
MNI China Press Digest June 10: Trade, Stablecoins, LNG Ships
AUD: Antipodean Update - Both Hold Up Ok Considering M/E Escalation
The AUD and NZD are both holding up pretty well considering the events unfolding in the Middle-East. The US Dollar continues to benefit from the wobble in risk but for now the moves seem to be contained. Lets see how the US session reacts and whether there are any more “proportional responses” to come.
- {AUDUSD Curncy} - 0.7025, -0.05%
- {NZDUSD Curncy} - 0.5820, +0.05%
- {AUDNZD Curncy} - 1.2075, -0.07%
