‘Japan will explore ways to encourage GPIF to boost domestic investment’

TOKYO: Japanese Finance Minister Satsuki Katayama said on Thursday the government wants to explore ways to encourage pension funds, including the Government Pension Investment Fund (GPIF), to increase their holdings of domestic financial assets.

“We would like to pursue measures that would encourage pension funds, including GPIF, to make substantially greater investments in Japanese financial assets,” she said at a regular press conference.

The remarks came as concern over the administration’s expansionary fiscal policy and risk of political interference on monetary policy sparked a sell-off on Japanese government bonds (JGB), pushing yields to multi-decade highs.

Economy Minister Minoru Kiuchi said on Friday the government would never convey in advance its preference on how the Bank of Japan (BOJ) should set interest rates, brushing aside market concern over political interference in monetary policy.

“There’s no change to the government’s stance that specific monetary policy means are left for the BOJ to decide,” Kiuchi told a news conference.

GPIF is one of the world’s largest pension funds, and held 293.4 trillion yen (USD1.81 trillion) in assets at the end of December. The fund’s mammoth size means that its movements are closely

watched by financial markets and any tweak in its strategy, no matter how small, can have a significant impact on the world’s bond, currency and stock markets.

It maintains roughly equal allocations to domestic equities, foreign equities, domestic bonds and foreign bonds.