Japan urges GPIF to repatriate funds, boosting yen and lowering bond yields

Finance Minister Satsuki Katayama announced that the Japanese government will encourage the Government Pension Investment Fund (GPIF)—the world’s largest pension fund with about 293.4 trillion yen ($1.8 trillion) in assets—to increase its holdings of domestic financial assets such as Japanese equities and government bonds. The policy aims to pull capital back into Japan, support the yen, and ease the recent sell‑off in Japanese government bonds (JGBs).

Following the comments, the yen rose roughly 0.3‑0.6 % to around ¥161 per dollar and 10‑year JGB yields fell about seven basis points to near 2.80 %. The Nikkei index gained about 1.8‑2 %. Analysts note the move could help anchor yen expectations and boost demand for JGBs, but warn that a large‑scale asset repatriation could also push the yen too high and create calibration challenges for monetary policy. The announcement has attracted global market attention because GPIF’s allocation decisions influence worldwide portfolios, and some observers flag potential short‑term volatility in global bond markets and risk‑assets such as cryptocurrencies.