- WSJ: Japanese Pension Funds Seek Safety in Gold !
by Forrest Jones, http://www.moneynews.com/
Japanese pension funds have begun investing in gold to shield themselves from homegrown and overseas market risks, The Wall Street Journal reported.
Global economic uncertainty and roiling markets are prompting Japanese pension funds, which traditionally invest in domestic stocks and bonds, to delve into gold, an attractive hedge against volatility.
“By diversifying currencies, we aim to reduce risks associated with them,” said Yoshi Kiguchi, chief investment officer at the Okayama Metal & Machinery Pension Fund, which has taken up small gold positions, the Journal reported. “Yields become stable if you put small amounts into as many types of holdings as possible.”
Of the fund’s 40 billion yen ($476 million) in assets, the fund has invested around about 500 million yen in gold, Kiguchi added. Currency risks are making gold more attractive as well.
The U.S. Federal Reserve has taken steps to stimulate the U.S. economy via rate cuts and trillions of dollars in liquidity injections to avoid deflationary decline and as a result, the greenback has weakened against other major currencies.