The Japanese government is calling for an increase in domestic assets; GPIF euphemistically says no: investment decisions are based only on beneficiaries' interests

The Zhitong Finance App learned that Kazuto Uchida, president of the Japanese Government Pension Investment Fund (GPIF), said on Monday that the fund will manage assets entirely based on the long-term interests of the beneficiaries. This statement was seen as a euphemism in response to the Japanese Prime Minister and some cabinet members calling on GPIF to increase their domestic asset holdings.

As one of the largest pension administrations in the world, “GPIF must always keep in mind the fundamental ownership of its management funds — the ultimate beneficiaries,” Uchida said at the Japan Ministry of Health, Labor, and Welfare (GPIF's superior supervisory authority) expert meeting.

Earlier, Japan's Finance Minister Katayama Satsuki called on GPIF to increase investment in domestic assets, triggering the market to pay close attention to whether the fund will adjust its investment portfolio of over 293 trillion yen (about 1.8 trillion US dollars). Katayama Satsuki also proposed the idea of including Japanese treasury bonds in personal tax-free investment plans. As soon as the news came out, Japanese treasury bonds rose in response.

Prime Minister Takaichi Sanae also recently added that it is important for pensions to be invested in domestic assets.

Amir Anvarzadeh, a Japanese stock strategist at Asymmetric Advisors, pointed out that Uchida's remarks are probably a euphemism to reject the government's demand to adjust asset allocation. He believes that judging from the current level of inflation and public spending, GPIF is unlikely to adjust the domestic asset allocation ratio in the short term, especially in terms of bonds. “They will never put insured persons at risk in order to cater to Takaichi Sanae.”

According to information, GPIF formulates an asset allocation framework every five years based on long-term goals and takes into account the investment targets proposed by Japan's Ministry of Health, Labor, and Welfare. In March 2025, GPIF decided to maintain a balanced allocation plan for four types of assets. Japanese domestic stocks, domestic bonds, foreign stocks, and foreign bonds each account for a quarter of the weight.

Uchida also made it clear at the briefing at the beginning of this month that GPIF will continue to manage portfolios based on long-term strategic allocation and will not be affected by short-term market fluctuations.

Pelham Smither, head of Pelham Smithers Associates, a Japanese stock research institute headquartered in the UK, believes that the political level clearly wants the fund to increase domestic asset allocation, and the government's demands may also meet the expectations of many market participants. However, he also pointed out that GPIF's configuration rules are strictly limited, and there is very limited room for adjustment.