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GPIF’s $200 Billion Bombshell to Aid Abe Inflation: Japan Credit

Prime Minister Shinzo Abe’s inflation drive may get a boost as Nomura Holdings Inc. forecasts as much as $200 billion in foreign asset purchases by Japan’s pension funds will weaken the yen.

Nomura predicts a selloff of local bonds by the $1.3 trillion Government Pension Investment Fund will depreciate the nation’s currency by about 10 yen against the dollar over the next 12-18 months, while Mitsubishi UFJ Morgan Stanley Securities Co. estimates an 8 yen slide. GPIF and other public pension funds will shift an additional 12.4 trillion yen ($122 billion) into foreign bonds and 7.5 trillion yen into overseas stocks, according to Nomura’s “upside scenario.”