Market Speaks: Gold Up 19% Over First Half Of 2022 In Japanese Yen

20 Jul 2022 , 05:55 PM

The WGC noted in a latest update that while major Japanese and global assets have witnessed declines in H1, gold has delivered a 19% return in local currency over the same period. Golds performance was driven by a combination of rising inflation, geopolitical risks and a weaker yen. In sharp contrast to other major central banks, the Bank of Japan (BoJ) has maintained its loose monetary policy to support economic recovery. Limited local bond yield movements may weaken the role of Japanese government bonds (JGB) as a risk hedge, while the gloomy global and domestic economic outlook could present additional challenges to Japanese investors. And, as the risk of global stagflation rises, golds role as a strategic asset may become more relevant for local portfolios. The WGC analysis, based on historical data and hypothetical portfolio compositions, shows that a 5% allocation to gold can help Japanese pension funds improve their returns and reduce risk. Historical analysis also suggests that gold is an effective tool to preserve purchasing power. Powered by Commodity Insights