Japan’s biggest public pension fund will likely ignore Finance Minister Satsuki Katayama’s call to boost domestic investment, at least in the short run, because of strict rules governing asset allocation and its public mandate.
Katayama sparked a jump in the yen on Friday when she said the government would pursue policies to encourage pension funds to buy more Japanese assets. The Government Pension Investment Fund (GPIF), one of the world’s largest, follows a rigid investment framework that is reviewed only once every five years. At its latest review, completed in 2025, the fund maintained its equal 25% allocation across four asset classes: domestic stocks, foreign stocks, domestic bonds and foreign bonds. The next scheduled review is in 2030.
Even if the GPIF were to consider revising its strategic allocation before then, such a decision would have to go through an established process. The GPIF’s statutory mandate is to maximize long-term returns for pension beneficiaries, meaning any increase in domestic investment would need to be justified on investment grounds rather than policy objectives. That could prove difficult as overseas assets have consistently outperformed their domestic counterparts over the past decade, both in equities and fixed income.
AloJapan.com