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.