Government Pension Investment Fund president Takahiro Mitani said the monetary easing done by the Bank of Japan will not be able to achieve its goal to spur the 2% inflation rate. The GPIF is dubbed as the largest pool of pension savings in the world at JPY124 trillion.

Mitani added that despite progress seen in ending deflation in the country, consumer-price gains were said to retain around 0.1% to 1%. The Japanese pension fund could review and change its asset allocations within a year after a panel appointed by the national government will recommend a domestic bond holdings review, Mitani said.

In an interview at GPIF's headquarters in Tokyo today, Mitani said, "A 1 percent inflation rate may be possible, but that's different to the Bank of Japan target. We haven't seen real demand to pull prices up yet. Whether inflation will be stable is questionable."

According to Bloomberg, Mitani's comments about the inflation in Japan goes against Prime Minister Shinzo Abe's appointee Takatoshi Ito, who heads an advisory panel on pension allocations. Last month, the news agency noted that Ito expressed his faith that the BOJ will be able to hit its 2% inflation target for price increase and suggested that the GPIF hold on to its investments that generates higher returns to fund its retirees. Japan's elderly population is the oldest in the world and is continuously rising, said Bloomberg.

Topix stock index of Japan jumped 62% in the last 12 months through the end of September, which is a record gain among developed markets in the world, said Bloomberg. The stock index was also noted as the steepest rally by the measure in the past forty years. Data on index compiled by the news agency also showed that a 1.8% return was obtained from domestic sovereign bonds. Assets of GPIF on the other hand had grown 15% in the same period, according to the pension fund's financial statements.