Australia's second-largest pension fund, ART, buys yen amid the 160 level and reduces U.S. Treasury holdings.

Huo Xing Finance reports that on August 26, Australia’s second-largest pension fund, the Australian Retirement Trust (ART), is making a contrarian bet on the Japanese yen. Managing approximately AUD 370 billion (about USD 265 billion) in assets, ART has steadily increased its yen holdings over the past six months, with its overweight position in yen reaching multi-year highs. The fund added to its yen position as the USD/JPY exchange rate neared 160, with some funding coming from reduced exposure to the U.S. dollar. Jimmy Louca, Senior Portfolio Manager at ART, stated that the market may be overestimating the downward pressure on the yen from energy prices while underestimating the likelihood of an interest rate hike by the Bank of Japan. Current interest rate swaps indicate an approximately 80% probability of a BOJ rate hike in September, with a hike in October already fully priced in by the market. A Reuters survey found that 57% of economists expect the BOJ to raise rates to 1.25% in September. Meanwhile, ART is currently underweight U.S. Treasuries by about 0.5 percentage points, citing persistently high U.S. inflation, economic resilience, and competition for capital between AI investment booms and government spending. Louca expects the yield on 30-year U.S. Treasuries to rise further toward 5.5%.