The Euro remains 0.5% higher against the Yen this week despite a pullback, as doubts over Japan’s pension fund reallocation weigh on JPY.
The Euro trimmed gains against the Japanese Yen on Wednesday, retreating from intra-week highs above 185.60 but staying 0.5% higher for the week. The Yen’s weakness persists amid uncertainty over Tokyo’s plans to repatriate pension fund investments, including those of the Government Pension Investment Fund (GPIF).
Japan’s Finance Minister had previously signaled a push for domestic reinvestment, sparking a brief Yen recovery. However, a Reuters report this week suggested the process could take months or years, prompting renewed speculative selling of the Yen.
Meanwhile, the Euro has found support from rising geopolitical tensions in the Middle East and elevated oil prices. Escalating conflicts and threats to energy infrastructure have kept oil near one-month highs, bolstering the single currency’s resilience.