Japan revamps investment panel of world's biggest pension fund


Japan has overhauled the investment committee of its $1.26T Government Pension Investment Fund (GPIF), the world's largest pension fund.

Prime Minister Shinzo Abe wants the GPIF to improve returns by making higher-risk investments and reducing its reliance on low-yielding government bonds.

Citigroup believes that the Bank of Japan could increase its bond-buying to offset reduced JGB purchases by the GPIF.

The revamp is part of Abe's "third arrow" of his strategy to reform the economy and lift Japan out of deflation.

Because of its mammoth size, the GPIF is closely watched as a bellwether for Japan's institutional investors. Last June, it increased its weighting of domestic stocks and lowered that for Japanese bonds.

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Comments (1)
  • Viper740
    , contributor
    Comments (466) | Send Message
     
    Reshuffling chairs on the Titanic.

     

    When the perception among investors/GPIF is that inflation will hit 2% and your bonds pay only close to 0%, something has to give, or else they are losing money on those bonds.

     

    Likely scenario: GPIF stops buying Japanese bonds -> Bank of Japan (BOJ) becomes buyer of last resort -> BOJ prints yen in order to buy the bonds, since they are broke -> Japanese yen tanks
    23 Apr 2014, 05:39 AM Reply Like
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