20 Nov 2013
On Focus: Japan's GPIF report due at 4-5pm Tokyo, will it be concrete on assets reallocation?
FXstreet.com (Barcelona) - The government commissioned GPIF - Government Pension Investment Fund - Advisory Panel, led by Tokyo University Professor Takatoshi Ito is due to present their proposal on an overhaul of the Japan’s Government Pension Investment Fund by 4pm – 5pm Tokyo time and then attend the media on a press conference at 5:30pm.
Markets' expectation on specific asset allocation ratios are low, with most investors looking instead to gain insights on general recommendations on organizational structure and governance. However, if the panel turns out to be more specific on aggressive asset allocations than otherwise thought, that could be a reason to embolden the USD/JPY.
In a recent WSJ interview, Professor Ito said he is looking to be “more concrete” regarding GPIF’s - Government Pension Investment Fund - portfolio. Takatoshi Ito said to the WSJ on Nov 15: "We are trying to make our proposals more concrete…Concrete in portfolio, concrete in governance, and concrete in a road map."
To sum up, the announcement is one to be monitored very closely as it represents a huge change to Japan's governance and investment strategy. While the disclosure of information regarding reallocation may take time to be made public, talk is that the GPIF will shift away from JGBs and other passive equity investments to a new index based on investment returns. The report is also thought to propose the creation of “baby funds” for riskier assets to be managed separately from the main fund.
Markets' expectation on specific asset allocation ratios are low, with most investors looking instead to gain insights on general recommendations on organizational structure and governance. However, if the panel turns out to be more specific on aggressive asset allocations than otherwise thought, that could be a reason to embolden the USD/JPY.
In a recent WSJ interview, Professor Ito said he is looking to be “more concrete” regarding GPIF’s - Government Pension Investment Fund - portfolio. Takatoshi Ito said to the WSJ on Nov 15: "We are trying to make our proposals more concrete…Concrete in portfolio, concrete in governance, and concrete in a road map."
To sum up, the announcement is one to be monitored very closely as it represents a huge change to Japan's governance and investment strategy. While the disclosure of information regarding reallocation may take time to be made public, talk is that the GPIF will shift away from JGBs and other passive equity investments to a new index based on investment returns. The report is also thought to propose the creation of “baby funds” for riskier assets to be managed separately from the main fund.