Weak Yen weighed by JPG selling - Nikkei

FXStreet (Bali) - As reported by the Nikkei, one of the sources of Yen weakness recently appears to be yen-selling by the banking and insurance units of government-backed Japan Post Group.

As noted by Nikkei: "On Aug. 8, when U.S. President Barack Obama approved airstrikes in Iraq, the yen stiffened to around 101 yen to the dollar, but was soon weighed down by large-lot sell orders. Japan Post Insurance sold the yen to purchase foreign bonds, according to a market observer."

Nikkei adds that "Japan Post's insurance unit has been boosting investments in foreign assets, as has its banking unit. The balance of Japan Post Bank's foreign-currency-denominated assets -- the bulk of which are bondholdings -- rose 6.8 trillion yen ($65.39 billion) over a year to some 25 trillion yen as of the end of June. Japan Post Insurance's holdings of foreign bonds and stocks, meanwhile, increased 700 billion yen to around 1.6 trillion yen."

Lastly, Nikkei quotes a Japan Post official as saying that "if domestic interest rates remain low, Japan Post Bank will continue to step up investment in foreign bonds..." with the Nikkei reporting that Japan Post Insurance "may invest an additional 300 billion yen or so in foreign bonds by the end of this fiscal year."