Salient to Investors:

Japan’s GPIF will reduce its holdings of Japanese bonds to 60 percent from 67 percent, increase local shares to 12 percent from 11 percent, increase foreign bonds to 11 percent from 8 percent, and increase overseas shares to 12 percent from 9 percent. Makoto Suzuki at Okasan Securities said the decision was negative as far as bond supply and demand is concerned.

GPIF did not alter the structure of its holdings during the worst global financial crisis in 80 years or in response to Japan’s 2011 earthquake and nuclear disaster.

Teruyoshi Sotome at Mizuho Securities said the change in GPIF’s portfolio will happen over the long-term and they are not going to increase foreign investments by large amounts going forward.

Hideo Shimomura at Mitsubishi UFJ Asset Mgmt said the fund is amending its targets to bring them into line with the changing value of its holdings and does not have to touch their assets, so the news won’t affect markets.”

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