Japan's huge pension fund to boost share purchases

Staff Writer
Columbus CEO

TOKYO (AP) — Japan's $1.1 trillion public pension fund on Friday approved a plan to double its holdings of shares and cut back sharply on bonds to help improve its investment returns.

Prime Minister Shinzo Abe and other officials say the change in the Government Pension Investment Fund's asset allocations is needed to ensure the fund can meet its obligations to retirees.

The plan agreed to Friday calls for holdings of bonds to fall from about 60 percent to 35 percent. Holdings of shares will rise to about 50 percent, with half in domestic shares and half in foreign shares.

Japan's share market got a boost Friday from the pension fund plan and from a central bank decision to expand monetary easing to boost growth.

The pension fund decision could bring tens of billions of dollars into the share market, which has languished this year after surging 57 percent in 2013.

The plan also calls for the managers of the fund, the world's largest, to improve governance and risk management.