07.08.201404:30:37UTC+00Japanese yen declines as GPIF eyes escalating stock allocation

The Japanese yen slid against the US dollar Thursday as it was pressured on news Japan’s Government Pension Investment Fund (GPIF) envisioned to raise its allocation to domestic equities.

The currency traded at ¥102.40, down from Wednesday’s ¥101.76.

The yen dropped as Tokyo shares climbed following political sources mentioned Japan’s GPIF planned to allocate more than 20% of its funds to domestic stocks, as compared to a current 12% target.

Sources familiar with the matter said GPIF would possibly decrease its weighting for Japanese government bonds to about 40%, previously 60%. It may also increase investments in global stocks once it announces its plan in the autumn season.

Gains in equities may weigh on the safe-haven currency as investors aim riskier assets, hoping to make bigger returns.