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Japan’s $1.8 trillion pension fund could shift assets back home

The plan to reduce overseas holdings could affect U.S. yields and the dollar, according to MarketWatch.

Reported · Written up by our desk · Fund Industry

Japan’s pension system is weighing changes that could see some of its large overseas allocation brought back into domestic markets, a move that MarketWatch says could ripple into U.S. financial conditions.

The outlet points to the scale of Japan’s pension assets, citing a $1.8 trillion figure for the country’s pension giant, and says selling foreign holdings could increase pressure on U.S. yields.

MarketWatch also links the potential foreign-to-domestic shift with potential spillovers for the dollar, noting that lower foreign demand could weigh on the currency.

Those effects could, in turn, influence U.S. stock demand by altering rates and broader market pricing, MarketWatch writes.

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