The Government Pension Investment Fund (GPIF) of Japan is considered the biggest pool of pension money in the world. Under the control of the state health ministry, investment decisions involving the fund were reportedly untraconservative and centers on a dull menu of bonds and stocks. Moreover, strict conditions had not allowed the state pension fund, which is currently valued at USD1.2 trillion, to make any direct investment to its own government bonds. Yield percentages of Japan's government bonds are considered to be the lowest in the world.

According to a Wall Street Journal report, the state of Japan had appointed a panel composed of seven experts in finance and business for them to make recommendations on reforms for the pension fund in order to get maximum returns from the fund's investments. The panel of experts was expected to provide its recommendations as early as November 20, and would be seen as the first of many steps to steer GPIF's bond-heavy portfolio into a more diversified one, which would flood the global markets with so much cash, said The Journal. The GPIF reform was reportedly part of Japan Prime Minister Shinzo Abe's push to revive the country's economy via his economic policies collectively called Abenomics.

Resona Bank asset management trading group leader Takashi Hiratsuka said, "The GPIF making decisions would mean many other pension funds following suit and adopting similar allocations. There would be a big impact for the asset classes into which funds flow." For example, a GPIF allocation to local stocks of Japan could direct JPY1.2 trillion into the market, comparable almost to Jamaican's economy size, said The Journal.

Source also disclosed to The Journal that one of the panel's important changes was the reconstitution of GPIF as a separate entity under a new statute, similar to what Japan did to Bank of Japan in 1997. Moreover, the new classification of the GPIF will have the health ministry signing off its responsibility to make investment decisions for the pension fund.