Japan’s GPIF – the world’s largest pension fund – announced last year it’d be shifting more money into domestic equities.
When GPIF speaks, the country’s other pension funds listen – and they follow.
That’s what happened in the 2nd quarter of 2016, when Japan pension funds bought up $9 billion worth of domestic stocks.
The funds purchased 965.4 billion yen ($9.2 billion) of local shares in the three months ended March 31, and sold 1.4 trillion yen of the country’s government bonds, an 11th straight quarter of net selling, according to Bank of Japan data published Friday. Pension managers also offloaded 86.7 billion yen in overseas assets, the first time they’ve been net sellers since the first quarter of 2014.
The BOJ results echo separate data from the nation’s bourse that showed trust banks, which manage pension money, were net buyers of Japanese equities almost every week in the first quarter while foreign investors sold. The Topix index tumbled 13 percent in the period and is down about 18 percent this year for the worst start since 1995, while the yen rose 6.8 percent against the dollar last quarter, its biggest such increase since September 2009.
Bond yields on 10-year Japanese government debt tumbled below zero in February after the BOJ said at the end of January that it will adopt negative interest rates on some bank reserves.