Japan's Government Pension Investment Fund (GPIF), one of the world's largest pension funds, reported an investment gain of 16.19 trillion yen ($103.25 billion) for the October-December period, marking its third consecutive quarter of gains. This positive performance was primarily fueled by strong returns from its holdings in both domestic and foreign equities. The total assets of the fund stood at 293.4 trillion yen at the end of December.
Despite the overall robust performance, the GPIF experienced an investment loss of 1.53 trillion yen from its domestic bond holdings. This loss is attributed to rising Japanese government bond yields, which have increased since Sanae Takaichi, a proponent of expansionary economic policies, became prime minister. Higher yields reduce the market value of bonds purchased when yields were lower. The fund maintains roughly equal allocations across domestic equities, foreign equities, domestic bonds, and foreign bonds.
Looking back at previous periods, the GPIF also had substantial gains. In the three months through June, it posted a record gain of 18.98 trillion yen ($133 billion), with domestic stocks being the top performers, gaining 14.4%. The fund's assets rose to an unprecedented 219.17 trillion yen at that time. Furthermore, in the three months ended September, the fund gained 5.52% or 14.447 trillion yen ($94.1 billion), with assets totaling 277.6 trillion yen. This was largely due to global equities and favorable currency swings, with Japanese investments returning 11.0% on stocks and losing 1.4% on bonds, while overseas shares added 9.8% and foreign bonds rose 3.0%.
