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Japan’s GPIF reports 3.54% gain in latest quarter

GPIF President Nohiro Takahashi

Japan's Government Pension Investment Fund on Friday reported a 3.54% gain for its fiscal first quarter, with rising stock markets and resilient economic conditions globally boosting its portfolio to 149.2 trillion ($1.33 trillion) as of June 30.

An announcement on the Tokyo-based pension fund’s website reported investment gains for the quarter of 5.1 trillion, with 2.3 trillion coming from the fund’s domestic equity holdings and another 1.9 trillion yen from overseas equities.

Foreign bonds added investment gains of 881 billion. But with the yield on the 10-year Japanese government bond edging up to nine basis points from seven basis points during the quarter, the fund suffered a marginal 1.4 billion loss on its domestic bond holdings.

For the quarter, the weight of domestic bonds in the GPIF portfolio slid to a new record low of 30.5% from 31.7% at the end of the prior quarter. That left the fund further below its target allocation of 35% but still well above the bottom of its permitted range between 25% and 45%.

Elsewhere, domestic equities rose to 24.4% from 23.3% and foreign equities climbed to 23.9% from 23.1%. Foreign bonds ended the latest quarter at 13.5%, up from 13%, and cash closed at 7.7%, down from a record high of 8.9% three months before.

Norihiro Takahashi, GPIF’s president, said in a statement that favorable corporate earnings and solid economic indicators at home and abroad left stock markets trending higher globally, while tightening moves by the U.S. Federal Reserve and expectations the European Central Bank could follow suit weakened the yen, powering the GPIF’s 3.54% gain for the quarter.