Japan to Reduce Pension Fund to Buy Equities

By IVCPOST Staff Reporter

Jun 08, 2013 03:04 AM EDT

Japan's public pension fund stated that it will reduce its holding of local bonds and buy more shares. The public pension fund of Japan is the world's biggest manager of retirement savings.

A portion of the assets in the Japanese bonds will be decreased to 60% from the previous 67%. This was stated in Tokyo by the Health and Welfare Ministry yesterday after announcing changes to take place in the mid-term plan of the Government Pension Investment Fund (GPIF).

Current shares are at 11% and will be increased to 12%. The Health and Welfare Ministry did not give a time frame when said changes will transpire.

According to bond strategist Makoto Suzuki, the move states a negative factor as far as bond supply and demand is concerned.

The shift towards increase asset yields comes of GPIF is a preparation to fund retirements as Japan holds the most elderly population in the world. This also comes after Prime Minister Shinzo Abe struggles to revive the country's economy through monetary and fiscal stimulus.

Asset allocations changes from GPIF took effect yesterday according to fund official Masahiro Ooe. He refused to give detailed information for the completion of said portfolio changes.

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