The Government Pension Investment Fund lost $52 billion (or, -4 percent) in the 2nd quarter of 2016.
This week, GPIF’s President talked about the two factors he believes contributed most to the market conditions leading to the loss.
From the Financial Times via CNBC:
Norihiro Takahashi, the GPIF’s president, said that markets during the quarter had seen the dollar-yen exchange rate “developing without a clear sense of direction”. In June, he said, two main factors produced especially high market volatility that strengthened the yen and caused stocks to tumble.
One of these, he said, was the fact that the result of the British referendum on the EU had been different from market expectations — a shock that saw the yen soar against all major international currencies as investors turned to it as a safe haven.
The surging yen, whose rate against the dollar is correlated with the Japanese stock market, produced a 7 percent plunge in the Topix Index on the session immediately after the June 23 referendum results emerged.
The GPIF president also cited US May employment data, which came in lower than market forecasts, as a source of uncertainty during the quarter.
Takahashi sought to head-off a public backlash over the most recent results, saying in a statement: “Even if market prices fluctuate in the short term, it will not harm the pension beneficiaries…we invest from a long-term viewpoint.”