Japan Rates Topics

Research evidence excerpt

Japan Rates Topics

J P M O R G A N Global Markets Strategy

06 July 2026

GPIF FY2025 results

Summary Japan Markets Research

Takafumi Yamawaki AC

• On July 3, GPIF released its FY2025 Annual Report. Supported by strong (81-3) 6736-1748

equity market performance, investment returns reached a substantial takafumi.yamawaki@jpmorgan.com

JPY41.4tn, bringing total pension reserves to JPY299.8tn as of March 2026 (of Hiroki Yagi AC

which JPY293.4tn was managed by GPIF). (81-3) 6736-6783

hiroki.yagi@jpmorgan.com

• As of March 2026, the overall pension reserve portfolio consisted of domestic JPMorgan Securities Japan Co., Ltd.

bonds (26.91%), foreign bonds (24.48%), domestic equities (23.81%), and

foreign equities (24.80%). Looking solely at assets managed by GPIF, the

allocations were domestic bonds (25.4%), foreign bonds (25.0%), domestic

equities (24.3%), and foreign equities (25.3%), remaining close to the 25%

target allocation. At least for now, we see no evidence that GPIF has altered its

investment policy in response to higher JPY rates or JPY weakness.

• In terms of cash flows, we estimate that GPIF allocated JPY14.75tn to domestic

bonds and JPY2.65tn to foreign bonds, while withdrawing JPY10.70tn from

domestic equities and JPY4.20tn from foreign equities. Continued gains in

equity markets during FY2025 resulted in notable rebalancing flows from

domestic equities into domestic bonds.

• Of the JPY14.75tn allocated to domestic bonds, we estimate that

approximately JPY10tn was directed to GPIF’s in-house management

program (government bond portfolio). While the investment policy of the in-

house portfolio remains largely a black box, the average duration of GPIF’s

JGB holdings was 8.37 years. Assuming that externally managed holdings had