Australian Retirement Trust, Australia’s second-largest pension fund managing approximately A$350-370 billion, has built its biggest overweight position in the Japanese yen in years. The fund is betting that markets are underpricing the Bank of Japan’s willingness to keep raising interest rates, pivoting away from the US dollar toward the yen, euro, and British pound. In March 2026, ART also increased its holdings in Japanese equities, particularly in the financial sector, as banks and insurers benefit directly from rising rates. This strategy is based on the view that the gap between BOJ hawkishness and Fed dovishness is wider than currently priced into currency markets.
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