How Exposed is Norway’s Sovereign Fund to Japanese Government Bonds?
DATA – Norway’s GPFG Allocation to Japanese Government Bonds
The Bank of Japan jilted institutional investors as it moved key interest rates into negative territory in specific instances. Specifically, the negative interest rates, a -0.1% rate, would affect a portion of financial institution’s deposits parked at the Bank of Japan. This “tax” could force banks to invest in more risky assets and ventures. The Bank of Japan mentioned it may lower interest rates deeper into negative territory if they deemed it necessary. The central bank’s asset purchasing program remains in place. The central bank is attempting to combat deflationary pressures. Negative yields make up around 25% of JPMorgan’s index for government bonds.
At the same time, wealth funds and pensions have allocations to Japanese government bonds. The largest wealth fund in the world had been steadily buying more Japanese government bonds since before 2010.
Norway’s Government Pension Fund Global (GPFG) has a low 1.6% allocation of its total portfolio to Japanese government bonds.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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