Spreadex Market Update

Asian Stocks slip and leading pension fund posts huge losses



Asian markets suffered slight losses on Friday’s close, Japanese stocks selling off over 1% after soft inflation data prompted concerns on the effectiveness of government stimulus. The Nikkei 225 closed down 195.24 points, which equates to 1.18%. There was a similar story in the Korean Kospi, dropping by 5.42 points (0.27%), although the Hang Seng index in Hong Kong did in fact rise by 0.33%.
 

The world’s biggest pension fund, Japan’s Government Pension Investment Fund, posted a loss of 5.2 trillion yen, or $52 billion. This was in the three months ended June 30th and reduced assets to 129.7 trillion yen. That erases a 4.1 trillion yen investing return for the previous six quarters starting October 2014, the month it decided to put half its assets into equities. However, Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd, downplayed this figure.  “Since its investments are tied to market moves, it’s natural that this would happen and there’s no point looking at it with a short-term view,” he said, “GPIF is so big that its losses look huge even though the fluctuations in its investments just mirror the market.”

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