Australia's second-largest pension fund has built its biggest overweight position in the Japanese yen in years, betting that markets are underpricing Bank of Japan interest rate hikes. Australian Retirement Trust, which manages about A$370 billion ($265 billion) of savings, has spent the past six months adding to the trade as the yen weakened toward 160 per dollar. The fund trimmed its exposure to the greenback to fund the position.

Jimmy Louca, a senior portfolio manager, stated the strategy reflects confidence in the yen's trajectory. The move highlights shifting global investment flows as major institutional players reallocate assets in response to central bank policy divergence.