Odds are falling that a governance overhaul will delay Japan's retirement fund from putting more of its $1.2 trillion into stocks.
The $1.25 trillion Government Pension Investment Fund, Tokyo, must review its asset allocations as soon as possible, Prime Minister Shinzo Abe said Friday, while Health Minister Yasuhisa Shiozaki said the pension fund is considering expediting the revamp.
Since becoming minister in charge of GPIF two weeks ago, Mr. Shiozaki has stopped saying the governance law must be changed first.
The comments by Mr. Abe and change in stance by Mr. Shiozaki buoy prospects for a quicker decision on GPIF's new asset allocation.
Mr. Shiozaki's reversal “takes away the possibility of a big delay in the announcement of GPIF's new portfolio,” Kazuhiko Ogata, chief economist at Credit Agricole in Tokyo, said Thursday. “Improving the investment system and hiring more experts are also needed for taking on more risk, not just strengthening governance. This probably also reflects Abe's wishes for the fund to alter its portfolio while proceeding with those tasks.”
