Japan Wants GPIF to Boost Domestic Investments

By Ronnie Harui

Signals that the Japanese government wants more investments at home, including from its massive pension fund, lifted local government bonds and the yen.

Japanese Finance Minister Satsuki Katayama said that the government is considering ways to encourage investors to buy more domestic securities.

"We are looking to pursue measures to encourage pension funds, including the GPIF [Government Pension Investment Fund], to make further investments in Japanese financial assets," she said Friday.

The GPIF is one of the world's biggest pension funds and manages about $1.8 trillion in assets. Changes in how it allocates funds can affect global financial markets.

Katayama's comments are "constructive for both JGBs and the yen over the medium to long term," said Masahiko Loo, senior fixed income strategist at State Street Investment Management, in an email.

"The announcement is also a smart policy signal from the administration at a time when markets have increasingly questioned how much firepower the Ministry of Finance has left from a [foreign-exchange] intervention perspective," Loo said.

Markets have been closely watching for signs of government intervention to support the yen, given repeated jawboning from officials keen to prevent the currency from weakening further. Many think that the government could step in if the dollar rises to 163 yen or higher.

"With over $1 trillion in FX reserves, intervention remains an option, but encouraging domestic institutional capital to stay invested at home is a more durable and structural way to support the yen over time," the strategist added.

The Japanese yen appreciated against most other Group of 10 and Asian currencies, and was recently trading at Y161.57 to the greenback, compared with Y162.38 late Thursday in New York.

Yields on five-year Japanese government bonds fell 4.5 basis points to 1.985%, on 10-year sovereign notes slipped 11 basis points to 2.77%, and on 40-year government bonds dropped 8.5 basis points to 3.950%. Bond yields move inversely to prices.

Japanese equity market also got a boost from Katayama's remarks, with the Nikkei Stock Average recently 1.4% higher at 68695.73.

Write to Ronnie Harui at ronnie.harui@wsj.com

(END) Dow Jones Newswires

July 10, 2026 02:15 ET (06:15 GMT)