Japan’s Pension Fund Will Increase Stock Market Allocation

Japan’s public pension fund, the world’s biggest, could raise its investment in domestic stocks to 20 percent of its portfolio from the current 12 percent, a top official with the fund was quoted as saying on Tuesday.

Yasuhiro Yonezawa, the recently appointed head of the investment committee of the $1.26 trillion Government Pension Investment Fund, said: “Twenty percent would not necessarily be too high a hurdle” for the GPIF’s weighting of Japanese stocks, the Nikkei financial daily reported.

Global financial markets are keenly watching the GPIF’s investment strategy as the fund, bigger than Mexico’s economy, is a huge investor and a bellwether for other Japanese institutional investors.

The government overhauled the GPIF’s structure in late April, appointing new committee members in a push towards Prime Minister Shinzo Abe’s goal of a more aggressive investment strategy.

GPIF now targets 12 percent of its investments in Japanese stocks, 60 percent in domestic bonds, 11 percent in foreign bonds, 12 percent in foreign stocks and 5 percent in short-term assets.

GPIF could lower its weighting in Japanese government bonds and shift the proceeds into Japanese stocks, foreign bonds, U.S. and emerging markets equities, the Nikkei quoted Yonezawa as saying.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza