By Makiko Yamazaki
TOKYO (Reuters) – Japan’s Government Pension Investment Fund (GPIF) reported on Thursday its first negative return in three quarters with an investment loss of 683.2 billion yen ($4.54 billion) in July-September, as a policy tweak by the central bank hit the government bond market.
The world’s largest pension fund lost 0.31% for the three months, trimming its overall assets to 219.3 trillion yen, it said in a statement.
The loss came after the fund, closely watched by global financial markets because of its mammoth size, posted a record quarterly investment return of 18.98 trillion yen in the previous quarter.
During the July-September period, the Dow Jones Industrial Average dropped 2.6%, while Japan’s benchmark Topix index rose 1.5%.
The GPIF’s foreign stock portfolio posted a quarterly loss of 0.1%, while its Japanese stock portfolio gained 2.5%.
Its Japanese bond portfolio posted a loss of 2.7%, while its foreign bond portfolio lost 0.8%.
The Bank of Japan (BOJ) took steps in July to allow long-term rates to move more freely in line with increasing inflation and growth, allowing the yield on the 10-year Japanese government bonds to cross 0.6% for the first time since 2014.
As of end-September, Japanese bonds accounted for 26.6% of its portfolio and foreign bonds accounted for 24.2%.
Foreign equities accounted for 24.7% and domestic equities 24.5%.
($1 = 150.4200 yen)
(Reporting by Makiko Yamazaki; Editing by Kim Coghill and Mrigank Dhaniwala)
