By Anton Bridge
TOKYO (Reuters) -Japan’s Government Pension Investment Fund (GPIF) reported on Friday an investment gain of 5.7287 trillion yen ($39.14 billion) in October-December, as an end to interest rate hikes brought down long-term U.S.
and European bond yields, boosting equities.
The world’s largest pension fund gained 2.62% for the three months, growing its overall assets to 225 trillion yen ($1.54 trillion), it said in a statement.
The fund, which is closely watched by global financial markets because of its mammoth size, had made an investment loss of 683.2 billion yen the previous quarter.
Markets have begun to price in lower interest rates in the future which pushed down long-term yields, the fund said in a statement.
The yen strengthened against the U.S. dollar over the period as Japanese long-term interests rates fell less than those in the U.S. and Europe, the statement said.
GPIF’s Japanese bond portfolio posted a gain of 0.95% and its foreign bond portfolio gained 2.55%.
Its foreign stock portfolio posted a gain of 4.91%, while its Japanese stock portfolio gained 2.05%.
The pension fund announced last month that it planned to relax its criteria in the selection of active asset managers to expand active investments in Japanese stocks and bonds.
Active investments made up around 16% of the GPIF’s total portfolio holdings as of March 2023.
During the October-December period, the Dow Jones Industrial Average rose 12.5%, while Japan’s Nikkei stock average gained 5%.
As of end-December, Japanese bonds accounted for 25.8% of its portfolio and foreign bonds accounted for 24.4%.
Foreign equities accounted for 25.1% and domestic equities 24.7%.
($1 = 146.4400 yen)
(Reporting by Anton BridgeEditing by Chang-Ran Kim and Lincoln Feast)
