Japan's huge pension fund set for major investment shift

Japan will announce Friday that its public pension fund -- the world's biggest -- will double the amount of equities it holds in its investment portfolio, reports said, as it seeks out higher returns to cope with an ageing population.
The welfare ministry will agree the Government Pension Investment Fund's plan that will see domestic and foreign stocks account for a combined 50 percent of its portfolio, up from about 25 percent now, the leading Nikkei business daily said.
The fund has $1.26 trillion in holdings, equivalent to a quarter of Japan's economy and towering over its nearest competitor -- Norway's $700 billion pension plan.
But, unlike some other more adventurous vehicles, it keeps the majority of its cash in super-safe -- and super low return -- Japanese government bonds.
With a growing number of retirees and shrinking workforce straining the public purse -- and Tokyo struggling to boost the world's number three economy -- Japan's pension fund managers are looking for ways to improve their returns.
Jiji Press news agency also said the fund would double its equity investments, and cut its holding of low-yield sovereign bonds to 35 percent from the current 60 percent.
The report has already helped propel Tokyo's stock markets, with the Nikkei 1.68 percent higher by the break and the Topix up 1.52 percent.
The expected changes come as Prime Minister Shinzo Abe shuffles into place the next piece of his "Abenomics" growth drive.
The bid to shake up Japan's slumbering economy after two decades of drift began in early 2013 with a huge public spending bonanza and unprecedented monetary easing from the Bank of Japan.
But, now the economy has slowed down and Abe is facing pressure to put in place some of the structural reforms he -- and most economists -- say are necessary.