By Tyler Durden
Authored by Kevin Muir via The Macro Tourist blog,
A few years ago, the Japanese government made an announcement that went unnoticed by many market pundits.
Since then, although there have been a few strategists who have speculated on its impact on risk assets, on the whole, it’s not something that gets a tremendous amount of attention. And that’s a mistake because it has had an immense effect on markets.
In October of 2014, the world’s largest pension plan, the enormous Japanese GPIF (Government Pension Investment Fund) reported a dramatic shift in their asset mix. From the FT:
A long-awaited overhaul of Japan’s national pension fund surpassed investors’ expectations on Friday, as the world’s largest institutional investor said it would put half of its assets in stocks while cutting its government bond holdings by a third.
The reshuffle of the Government Pension Investment Fund, apparently timed to maximise the impact of another shot of monetary stimulus from the Bank of Japan, was the result of almost two years of pressure from the administration of Shinzo Abe, prime minister.
Mr Abe has been keen to see the GPIF adopt a much more aggressive approach in managing its Y127tn ($1.14tn) in assets, in order …read more