The battered yen languished near a 40-year low and was on track for a weekly loss on Friday, keeping traders wary of potential intervention from Japanese authorities as renewed Gulf hostilities loomed over markets.<\/p>\n
Wilatlak Villette | Moment | Getty Images<\/p>\n
The yen<\/a> bounced on Friday on news that \u200bJapan plans to encourage \u200bpension funds to \u200bincrease their holdings of domestic financial assets, a move analysts said could offer more support to the battered currency than intervention.<\/p>\n Japanese Finance Minister\u00a0Satsuki Katayama\u00a0said the government was pursuing measures that \u2060would \u200cinclude the\u00a0Government Pension Investment Fund\u00a0(GPIF), one of the \u2060largest pension funds in the world, to make “substantially greater investments in Japanese financial assets”.<\/p>\n The yen jumped from the weaker side of 162 per\u00a0dollar\u00a0to an intraday peak of 161.285. It was last 0.4% stronger \u200cat 161.70 per\u00a0dollar.<\/p>\n “The pension funds are pretty large in size (and) currently, 50% is allocated to foreign investments in their strategic allocation, (so) a shift in \u200bthat would definitely create a lot more inflows for domestic assets,” said\u00a0Fabien Yip, a market analyst at IG.<\/p>\n “That’s supportive of the currency and at the same time, also supportive of equities and bonds.”<\/p>\n Broad-based yen rally<\/p>\n The rally was \u2060broad-based, with the euro<\/a> and British pound<\/a> down around 0.3% against the yen.<\/p>\n Before Friday’s news, the \u200cyen had been languishing near 40-year lows, keeping traders on \u200cguard for potential intervention by Japanese authorities.<\/p>\n The yen’s rise on Friday in turn pushed the\u00a0dollar\u00a0lower, as it fell 0.1% against a basket of currencies to 100.81. The world’s most traded \u2060currency was set to end the week little changed.<\/p>\n The euro rose 0.1% to\u00a0$1.144, while \u2060sterling was also 0.1% higher at\u00a0$1.343.<\/p>\n