The biggest-ever reshuffling of Japan’s Government Pension Investment Fund will result in the fund slashing its target for local bond holdings by a third to 40 percent of assets, according to analysts.
As Japan girds for a wallop to spending from a looming sales-tax increase, discussion in the nation’s parliament turns to history -- not to 1997, when the last bump in the levy helped trigger a recession, but to 1937.
Deutsche Bank AG has dubbed Japanese government bonds the world’s most-expensive debt and BNP Paribas SA predicts a selloff as soon as next month when the nation’s biggest pension fund starts seeking higher returns.
Putting the final touches to his latest book in October, retired Yale University professor Koichi Hamada received a phone call at his Connecticut home. It was Shinzo Abe, whom he’d known for more than a decade and was running for a second shot at being Japan’s prime minister.
The world’s biggest retirement fund should put half its $1.2 trillion of assets in stocks and increase its yearly return goal to 5 percent, said the head of a panel that advised lawmakers on overhauling public pensions.
The world’s largest manager of retirement savings should reduce holdings of domestic bonds and create a board of directors to replace the current governance structure, an expert panel told Japan’s ruling party.
None of Japanese Prime Minister Naoto Kan ’s four predecessors lasted more than a year in office. He may be set to avoid a similar fate as the country’s strongest earthquake and a nuclear crisis rule out the likelihood of an early election.