Japan’s Government Pension Investment Fund has appointed active domestic bond managers for the first time in five years, selecting three firms in May: Asset Management One, Mitsubishi UFJ Trust & Banking, and Sumitomo Mitsui Trust Asset Management. The mandate targets stronger in-house expertise in a more volatile Japanese Government Bond market, while also pursuing benchmark-beating performance and broader diversification across risk assets.
Performance And Market Context
The fund’s domestic bond holdings have been squeezed by falling prices and sharper market swings, posting a 5.1% loss in the year to 31 March even as total assets delivered a 16.5% return. The shift comes as markets contend with inflation, rising government spending and a Bank of Japan tightening cycle. Separately, officials have called on GPIF to increase domestic allocations, a move that could, over time, provide support for the Japanese yen.
