“Japan’s public pension fund, the world’s biggest manager of retirement savings, said it will reduce its holdings of local bonds and buy more shares.
The proportion of assets held in Japanese bonds will be cut to 60 percent from 67 percent, the health ministry said today in Tokyo at a briefing to announce changes to the mid-term plan of the Government Pension Investment Fund. The weighting of local shares will be increased to 12 percent from 11 percent currently. The Health and Welfare Ministry, which oversees pensions, didn’t give a time frame for the changes.
“It was a negative factor as far as bond supply and demand is concerned,” said Makoto Suzuki, a bond strategist at Okasan Securities Co. in Tokyo, one of the 24 primary dealers obliged to bid at government debt sales.
GPIF’s shift toward higher-yielding assets comes as it prepares to fund retirements in the world’s most elderly population and Prime Minister Shinzo Abe tries to revive the economy through fiscal and monetary stimulus. Domestic shares have slid since Abe said yesterday that a legislative campaign to loosen rules on businesses, the “third arrow” of his economic plan, won’t begin for months.
Nikkei 225 Stock Average futures in Singapore and Osaka erased gains after the GPIF announcement. June futures on the Nikkei 225 fell 1.5 percent to 12,645 at the 2:30 p.m. close in Singapore while those in Osaka fell 1.1 percent.
