Japan urges pension funds to boost domestic asset allocations

4 min read

Japan's finance minister suggested that the $1.8 trillion Government Pension Investment Fund and other retirement funds increase allocations to domestic assets, sparking speculation about capital repatriation. Japan's foreign asset holdings reached a record 561.75 trillion yen in 2025, with about $930 billion managed by GPIF, and markets reacted quickly: the yen strengthened about 0.4% and Japan's 10-year government bond yields posted one of their largest single-day declines in nearly two years. Officials and analysts said the move could reduce overseas purchases and affect global bond markets, but they cautioned the scale and long-term impact remain uncertain.

Pension funds may shift to domestic assets, altering global flows