×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Japanese | Pension | Funds | Gold

WSJ: Japanese Pension Funds Seek Safety in Gold

Tuesday, 18 December 2012 01:04 PM EST

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."

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

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.

Meanwhile, the yen has been sliding now that the leader of Japan's Liberal Democratic leader party, Shinzo Abe, is set to become the country's next prime minister and will try to follow up on past calls for the Bank of Japan to ramp up monetary easing programs of its own, possibly on an open-ended basis similar to the Federal Reserve.

Weaker currencies often fuel inflationary fears, a cocktail for rising gold prices especially when applying to safe-haven currencies such as the U.S. dollar and the yen.

"Responding to inflation is becoming one issue," said Hiroaki Nakaoka, sales manager for SPDR ETF Japan at State Street Global Advisors (Japan) Co., the Journal added.

Gold, meanwhile, is poised to see a pickup in seasonal demand, experts said.

While prices have slumped recently thanks to budgetary concerns in the U.S. that have fueled some safe-haven dollar demand, the proximity of the Chinese New Year in February will herald in a ramp-up in physical demand for the yellow metal.

"We are entering a period of seasonally strong demand from China, and this can support gold prices between now and the beginning of the Chinese New Year in February," said Nic Brown, an analyst at Natixis, a global asset management firm, according to Reuters.

Editor's Note: Get David Skarica's Gold Stock Adviser — Click Here Now!

© 2022 Newsmax Finance. All rights reserved.


StreetTalk
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, who traditionally invest in domestic...
Japanese,Pension,Funds,Gold
402
2012-04-18
Tuesday, 18 December 2012 01:04 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved