Japan’s Government Pension Investment Fund (GPIF) did not discuss portfolio allocation at its September meeting, dampening speculation that the $2 trillion fund would respond to Prime Minister Sanae Takaichi’s calls to increase domestic asset purchases. The management committee did not receive a report from the portfolio review team in September, unlike in August, when such a report fueled heightened investor interest. GPIF’s summer meeting was held after Takaichi urged the fund and other pension bodies to boost domestic investments, even though the board had concluded in March that no review was needed.
Investors speculate Takaichi aims to tap GPIF to support the yen and Japanese government bonds. The yen hit a 40-year low in July, while Japan’s 10-year bond yield rose to its highest since 1996 in September. GPIF currently allocates 25% each to Japanese bonds, foreign bonds, domestic stocks, and overseas equities, a mix adopted in April 2020; previously it held 35% in domestic bonds and 15% in foreign bonds.
Kenji Shiomura, a former GPIF official now at Daiwa Institute of Research, said a revision to the basic portfolio remains possible at a future board meeting.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing