Japan Mega-Pension to Shift to Stocks Announcement for New Portfolio for Fund Expected Friday Afternoon
TOKYO—Japan’s welfare minister is likely to approve a new portfolio for the country’s ¥127 trillion ($1.2 trillion) pension on Friday, in a move that will have a significant impact on financial markets, according to people familiar with the matter.
The new portfolio will cut the fund’s 60% target allocation to Japanese bonds by roughly half and sharply increase weightings to Japanese stocks and foreign assets, the people said. The new allocation is expected to be announced at a news conference Friday afternoon.
The people say the shift to the new allocation will take place gradually as the fund watches market conditions closely. The Government Pension Investment Fund has already been slowly unloading its hefty domestic bondholdings in recent months.
Market participants are paying close attention to signs of an allocation shift by the giant fund, as changes in its investment stance could mean a move of trillions of yen in global financial markets. Reports of the new allocation helped push up Japan’s benchmark Nikkei Stock Average by 1.7% during the morning session Friday.