Japanese health minister Kenichiro Ueno, who oversees the Government Pension Investment Fund, said the GPIF is still considering whether a review of its asset allocation is needed. The fund decided in March that there wasn't a need for it, but it's continuing to consider the matter in an appropriate way. He also said that the investment environment hasn't diverged too much from the GPIF's assumptions for its portfolio.

The GPIF's allocation decisions are closely watched by traders around the world due to its mammoth size, overseeing about ¥318 trillion ($2.1 trillion) in assets at the end of June. That means that on paper a 1 percentage-point change in allocations can translate to more than ¥3 trillion in fund flows. The pension fund now tries to hold 25% each of four asset classes in its investment portfolio -- domestic bonds, overseas debt, Japanese shares and foreign equities.

But analysts have said that after surges in Japanese bond yields in past months, there's scope for GPIF to expand its allocation target for domestic bonds. Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama have also called on Japanese pension funds to park more funds in the home market. GPIF's management committee convened on Aug. 21, its first publicly announced meeting in the holiday month in seven years.

The gathering spurred speculation that the fund may change its allocation.