Japan’s Government Pension Investment Fund (GPIF) posted on Friday an investment gain of 10.7 trillion yen ($70.6 billion) in the October-December quarter, marking a recovery from a loss of 9.13 trillion yen in the preceding quarter.
The GPIF is one of the world’s largest pension funds and had total assets of 258.7 trillion yen at the end of December.
The fund, which is closely watched by global financial markets due to its scale, had an investment return of 4.31 per cent compared to the previous quarter’s negative 3.57 per cent as global stock indexes advanced.
GPIF said the gains were due in part to strong corporate earnings, expectations for economic policies under the Trump administration, and signs of a soft landing in the United States.
The GPIF invests roughly a quarter of its assets each in domestic and overseas stocks and bonds.
In January, Japan’s finance ministry said it plans to allow the fund to participate in Japanese government bond auctions directly to allow it to more easily rebalance its portfolio.
GPIF’s Japanese bond portfolio posted a loss of 1.33 per cent for the third quarter and its foreign bond portfolio gained 4.12 per cent.
Its foreign stock portfolio posted a gain of 8.96 per cent, while its Japanese stock portfolio gained 5.55 per cent.
During the October-December period, the Nikkei stock average gained 3.2 per cent while the S&P 500 gained 3 per cent.
As of end-December, Japanese bonds accounted for 25.5 per cent of GPIF’s portfolio and foreign bonds accounted for 24.6 per cent. Foreign equities accounted for 24.9 per cent and domestic equities 25 per cent.
Source: Reuters
