Australian Pension Fund Bets Big on Yen Strength Amid Rate Hike Expectations

Australia's second-largest pension fund has taken a significant bet on the Japanese yen, citing underpriced Bank of Japan interest rate hikes. The Australian Retirement Trust, which manages about A$370 billion ($265 billion) of savings, has built its biggest overweight position in the yen in years.

The trust, led by senior portfolio manager Jimmy Louca, has spent six months adding to the trade as the yen weakened toward 160 per dollar. The fund's decision was partly funded by trimming its exposure to the US dollar.