(Adds missing "trillion" to size of GPIF fund in opening
* GPIF originally scheduled to complete review by March 2015
* GPIF's portfolio larger than Mexico's economy -- 14th
By Takaya Yamaguchi and Chikafumi Hodo
TOKYO, June 6 Japanese Health Minister Norihisa
Tamura said on Friday that he was instructed by Prime Minister
Shinzo Abe to accelerate an asset allocation review of Japan's
$1.26 trillion Government Pension Investment Fund.
Global financial markets are keenly watching the GPIF's
strategy review, because the fund - bigger than Mexico's economy
- is a huge investor and a bellwether for other Japanese
GPIF President Takahiro Mitani had signalled last year that
the public fund could complete the process by December.
With Japan moving out of deflation, Prime Minister Abe's
government is pressing GPIF to change its domestic-bond centric
portfolio and diversify into assets such as Japanese stocks to
generate higher returns for Japan's fast-greying population.
Tamura said he could not say when GPIF could complete its
review of asset allocation. Originally, GPIF was scheduled to
complete the review by March 2015.
"I believe a review in GPIF's allocation must take place as
soon as possible," Tamura told a news conference after a regular
cabinet meeting. The GPIF is administered by Tamura's Ministry
of Health, Labour and Welfare.
Earlier this week, the ministry completed an evaluation of
the public pension system that paved the way for the GPIF to
begin the review of its asset allocations, a process set to
shift more money into stocks and out of domestic bonds.
The evaluation will form the basis for GPIF to raise its
targeted returns to 1.7 percentage points over nominal wage
increases, from the 1.6 percent gross amount set five years ago.
GPIF could raise its investment in domestic stocks to 20
percent of its portfolio, the Nikkei financial daily reported on
Tuesday quoting Yasuhiro Yonezawa, the recently appointed head
of GPIF's investment committee, as saying.
"Twenty percent would not necessarily be too high a hurdle"
for the GPIF's weighting of Japanese stocks, the Nikkei quoted.
Founded in 2001, GPIF conducted the biggest shake-up of its
investment strategy a year ago by revising its allocation
targets to raise the core weighting for Japanese stocks while
lowering that for domestic bonds.
GPIF currently targets a core weighting of 12 percent in
Japanese stocks, 60 percent in domestic bonds, 11 percent in
foreign bonds, 12 percent in foreign stocks and 5 percent in
(Reporting by Takaya Yamaguchi and Chikafumi Hodo; Editing by
Chris Gallagher and Eric Meijer)