Japan’s Pension Fund to Buy More Stocks and Foreign Bonds

Japan’s giant public pension fund said Friday that it will increase the proportion of domestic stocks and foreign bonds in its investment portfolio to 25 percent and 15 percent, respectively, while slashing its holdings of debt issued at home to 35 percent.

In tandem with the Bank of Japan’s decision earlier in the day to ease its monetary policy further, the Government Pension Investment Fund’s move is apparently aimed at boosting financial markets, with Prime Minister Shinzo Abe’s government having set higher share prices as one of its goals.

The change in the GPIF’s model portfolio, approved by Health, Labor and Welfare Minister Yasuhisa Shiozaki, is expected to push down the yen amid hopes that the profitability of Japan’s export-oriented companies will improve.

Some analysts, however, have expressed fears that bolstering investment in riskier assets may threaten the safety of pension fund assets, though it is likely to help the world’s largest institutional investor seek higher returns.

The GPIF, supervised by the Ministry of Health, Labor and Welfare, manages huge employee and national pension reserves, with 127 trillion yen in assets under management at the end of June.

via Mainichi

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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