The president of the giant public pension fund says the fund’s recent decision to change its investment portfolio was a measure to boost domestic stocks.
“We are not deliberately increasing stockholding to embody ‘Abenomics,’ ” Takahiro Mitani, president of the Government Pension Investment Fund, said in an interview Monday, referring to Prime Minister Shinzo Abe’s policy mix of aggressive monetary easing, fiscal stimulus and growth-oriented reforms.
On Oct. 31, the GPIF said it will increase the proportion of domestic stocks in its investment portfolio to 25 percent and foreign bonds to 15 percent while slashing its holdings of debt issued at home to 35 percent.
The previous portfolio standard set by an experts’ committee required only 12 percent in Japanese stocks and 11 percent in overseas debt, compared with 60 percent in domestic bonds.
Mitani pointed to the possibility that domestic bond assets will shrink due to a rise in interest rates once Japan exits from decades-old deflation.
With Abe and senior officials in his administration making comments that seem to link the success of Abenomics to GPIF reforms, Mitani warned them to be careful with their remarks.
“There might be a misunderstanding that reforms were made because of political pressure,” he said.
Mitani also called for reviewing the current system in which the fund’s president is vested with all the power.
“It is not desirable for the president alone to decide at his own discretion,” he said, calling for the setup of a consensus-based board composed of experts in finances and asset management.
Yasuhisa Shiozaki, head of the Health, Labor and Welfare Ministry, which supervises the GPIF, has also been pushing for a consensus-based decision-making body, and aims to have relevant legislation revised during the ordinary Diet session next year.
Mitani revealed as well that one of the eight members of the GPIF’s investment committee opposed the portfolio changes, arguing that increasing the holdings for stocks cannot gain public consent. The panel consisting of experts examines the fund’s investment policy.
The GPIF manages huge employee and national pension reserves, with ¥130.9 trillion in assets under management at the end of September.
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