Japan’s proposal to encourage its massive public pension funds to increase investments in domestic assets has sparked expectations of a major shift in global capital flows, lifting the yen and triggering a sharp rally in Japanese government bonds, Reuters reported.
According to Reuters, Japanese Finance Minister Satsuki Katayama suggested that the $1.8 trillion Government Pension Investment Fund (GPIF) and other retirement funds should consider increasing allocations to domestic assets. While no formal policy details have been announced, the remarks immediately fuelled speculation that Japan could begin reversing years of overseas investment.
