The world's biggest retirement fund needs to cut bond holdings now because the Japanese government will follow an advisory panel's recommendation that the wealth manager seek higher returns, the panel's head said.
The ¥124 trillion Government Pension Investment Fund should pare domestic bonds immediately to 52 percent of assets, its lower limit, in part by selling to the Bank of Japan, said Takatoshi Ito, chairman of the advisory group. Local debt comprised 58 percent of the fund's assets as of Sept. 30.
"GPIF needs to start reducing bonds as soon as possible," Ito said in an interview Friday. "Now is the right time to sell, while the BOJ is buying."