USD/JPY Falls as Japan Steers GPIF Toward Domestic Assets

USD/JPY has retreated from 162.84 highs after Japanese officials signaled plans to redirect GPIF pension assets domestically, triggering yen buying and JGB relief. The pair earlier surged above 162 on wide U.S.-Japan yield gaps and carry-trade flows, despite suspected intervention and a soft June NFP print of only 57,000 jobs. Tokyo issued repeated verbal warnings and allowed thin July 4 liquidity to raise intervention risk, yet no action materialized until the GPIF catalyst. Citi tied ongoing yen pressure to record Japanese equity levels and flagged 165 as the next threshold, while BofA now reports bearish sentiment at a four-year extreme with leveraged funds holding record net short positions.