GPIF said to allow investing up to 31% in foreign bonds

Japan’s “whale” is to widen its permissible range of foreign bonds allocation target to 6% from the current 4%

The above is according to sources cited by Reuters. On Tuesday, Japan’s GPIF – the world’s largest pension fund – had said that it would raise its allocation of foreign bonds in its portfolio from 15% to 25%.

Under its usual practice and guidelines, they are permitted to go 4% higher or lower than the target allocation but it appears that they are opting to widen the range from 4% to 6% now ahead of the start of the new fiscal year in April.

Again, just take note of this because if the GPIF is to increase its holdings of foreign bonds and move away from Japanese bonds – which are less attractive due to negative yields – then it could spell some weakness for the yen based on the flows associated.

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