Japan Rates Insights: GPIF asset allocation: What to watch

Research evidence excerpt

Japan Rates Insights: GPIF asset allocation: What to watch

Global Markets Research

17 July 2026Japan Rates Insights

Rates - Japan

Research Analysts

GPIF asset allocation: What to watch Japan Rates Strategy

Ryosuke Matsuzaki - NSC

Technically feasible, but challenging in terms of justification. ryosuke.matsuzaki@nomura.com

+81 3 6703 3871

Summary Masakimasaki.kuwahara@nomura.comKuwahara - NSC

Justifying a change to the policy portfolio +81 3 6703 3876

would be difficult

GPIF’s policy portfolio must be consistent with the model portfolio and the assumptions for

expected returns. Accordingly, a mere desire to “increase domestic assets” would be a

weak basis for a change and would not be easy to justify.

If the government takes the lead, a revision of the Basic Policy

of Reserves would trigger the review process

If the government were to lead the review, a revision of the Basic Policy of Reserves

would be the key starting point. This would involve a review of the required return and the

model portfolio, and would also require consultations between the Minister of Health,

Labour and Welfare and the relevant cabinet ministers. If the government has an incentive

to change the allocation, these would be the actions that should be closely monitored.

From the start of the review to actual changes in asset

management, at least around six months may be needed

In the past, it has taken approximately seven to eight months from the start of discussions

on the Basic Policy of Reserves to the publication of the policy portfolio. The actual

reallocation of funds, however, would very likely to begin somewhat earlier, and we would

expect it to take around six months from the start of the review for observable market

impacts to emerge.