Yen continues decline on pension fund reform prospects

The Japanese yen continued its downward spiral against the dollar on speculation the Japanese government will go ahead with the pension fund reforms, and with data that showed slowing inflation in Japan.

The Japanese retreated versus most major peers on Friday after Japan’s Health minister Yasuhisa Shiozaki said the Government Pension Investment Fund (GPIF) will conduct some reforms within existing law.

A law change could mean the GPIF will buy more overseas assets, which will add more downward pressure to the yen.

The Japanese yen fell to its lowest in six years against the dollar earlier this week, and is headed for the largest monthly drop since January 2013.

The Japanese yen was last down 0.16% to 108.920 per dollar. As of 03:39 a.m. ET

Meanwhile, inflation in Japan slowed more than estimated in August, according to government data earlier today, the latest setback to the Bank of Japan’s efforts to achieve its 2% inflation target.

If inflation continues slowing down over the coming months, the central bank could start thinking about adding to its large-scale easing program.


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