TOKYO, June 18 (Reuters) - Japanese public pension funds including the Government Pension Investment Fund (GPIF), the world’s biggest pension system, sold government debt at a faster pace in January-March than the previous quarter, central bank data showed on Wednesday.
The public pension funds, in which GPIF plays a dominant role, accelerated their selling of Japanese government bonds (JGBs) to a net 1.8 trillion yen ($17.64 billion) in the first quarter from 267.5 billion yen in October-December, the Bank of Japan’s quarterly flow of funds data showed.
According to the data, the net sales of 1.8 trillion yen was the largest since the second quarter of 2012, when they sold a net 1.98 trillion yen.
Prime Minister Shinzo Abe is pushing for GPIF, which holds $1.26 trillion in assets, to invest more in domestic stocks and less in Japanese government debt to generate higher returns for the fast-greying population and to boost economic activity.
Global financial markets are keenly watching GPIF’s strategy review because the fund - bigger than Mexico’s economy - is a huge investor and a bellwether for other Japanese institutional investors.
Currently, GPIF targets 12 percent of its assets in Japanese stocks, 60 percent domestic bonds, 11 percent foreign bonds, 12 percent foreign stocks and 5 percent short-term assets. The fund has wiggle room of 6 percentage points either side of the core target for domestic stocks and 8 points for JGBs. ($1 = 102.0500 Japanese Yen) (Reporting by Sumio Ito; Writing by Stanley White and Shinichi Saoshiro; Editing by Edmund Klamann and Richard Borsuk)