Norway's sovereign wealth fund to raise its holdings of Japanese government bonds
MacroDigital Finance
Norges Bank Investment Management (NBIM), one of the world's largest sovereign wealth funds, has announced plans to increase its holdings of Japanese government bonds as part of a diversification strategy. In a letter to the Norwegian Ministry of Finance, NBIM proposed a review of its bond portfolio, aiming to raise the allocation to Japanese government bonds from 4.6% to 7.4% of its bond holdings. According to estimates by US media, this would represent an increase of approximately $17 billion (2.7 trillion yen). Meanwhile, the fund plans to reduce its allocations to US Treasuries and eurozone government bonds, and to cut the overall share of government bonds from 70% to 50%. The reduction in US Treasury holdings is expected to be around $80 billion (12.5 trillion yen), which could put upward pressure on long-term US interest rates. If implemented, this move could help curb rises in Japanese long-term interest rates and limit yen depreciation.
