Rumors of Japan’s pension funds rebalancing are denied

ME News, July 13 (UTC+8). Reuters, citing an insider with knowledge of internal government discussions, reported that Japan has no plans to modify the target asset allocation of its national pension fund. However, it may increase the scale of its domestic asset investments within the current floating range.

In response to the news, the yen and Japanese government bonds weakened again. The yen briefly depreciated by 0.4% to 162.36 yen per 1 USD, before the decline was only slightly eased after a follow-up remark by Chief Cabinet Secretary Toru Kinuchihara. At a press conference on Monday, Kinuchihara said that GPIF reviews its investment portfolio every year, and if there is a substantial change in the market environment, it will initiate a formal adjustment process. The Ministry of Health, Labour and Welfare, which oversees the fund, declined to comment on the matter.

Last Friday, Japanese Finance Minister Kogetsu Katayama said that the government will introduce supporting measures to encourage pension investment institutions such as GPIF to significantly increase their holdings of Japan’s domestic financial assets. The remark quickly boosted the yen and Japanese government bonds, as the market bet that GPIF— the world’s largest pension fund—will see inflows on the order of hundreds of billions of dollars into the domestic market. As of the end of March this year, GPIF managed assets totaling 293.6 trillion yen, or $1.81 trillion. (Source: BlockBeats)