Moves are underway that would allow Japan’s Government Pension Investment Fund, Tokyo to participate directly in government bond auctions, according to people familiar with the matter.
GPIF, as the fund is commonly known, at present purchases Japanese government bonds from auctions via securities companies.
The Ministry of Finance will soon invite public comments and amend a government ordinance that defines participants in JGB auctions, according to the people familiar with the matter, who asked not to be identified as the information isn’t yet public.
After the ordinance is amended, the GPIF will move forward to join the network that handles JGB settlements with the Bank of Japan. It is expected that the GPIF will be able to obtain the qualification for participation as early as this spring.
The change would make it easier for GPIF to rebalance its portfolio, while also making it harder for its investment activities to be leaked to the outside world.
Neither GPIF nor Ministry of Finance officials would comment on the matter.
At present, the GPIF is investing 25% of its assets in domestic and overseas stocks and bonds respectively, and rebalancing is carried out when the ratio of each asset deviates from 25%.
As of January, there were 220 participants in government bond auctions, including financial institutions such as banks and securities companies, as well as life insurance companies.
