04.06.2014 7:04

The largest capital redistribution begins?

Global financial markets may soon pour fresh capital flows, and they come from Japan. The country’s authorities have approved the change of the investment declaration pension fund , and now the money will be redistributed into riskier assets .

Immediately it should be noted that the Pension Fund of Japan with the acronym GPIF is the largest in the world, with a volume of around $ 1.5 trillion . GPIF change began in April in one of the plans of Prime Minister Shinzo Abe on a more aggressive investment policy.

The Fund is expected to increase its profitability will reallocate investments in favor of risky assets. To do this, it will be available to sell Japanese bonds, that with high probability cause weakening of the Japanese yen – another part of the plan Abe . The weakening of the yen by 18% in the past year has helped boost inflation to five-year highs .

By the way, if we talk about the forex market , the largest Japanese investment banks Nomura and Mitsubishi UFJ Morgan Stanley Securities predict currency devaluation of the rising sun for about 8-10 yen per dollar .

The fact that the GPIF, by all accounts , to be paid in 2019 the population of huge sums , and since 2009 , he pays more than it receives in contributions , an urgent need to increase profitability.

In the next 2-3 months the ad hoc working group will develop a detailed plan of redistribution of assets . The newly appointed head of the investment committee of the fund Yasuhiro Yonezawa said recently that the pension fund can increase investments in domestic stocks and 20 % of the portfolio from the current 13%.

Structure investments in general now looks as follows: 60% of investment goes to Japanese government bonds , 11% – in foreign bonds , 12% – in foreign stocks and 5% – in the short-term instruments .

Besides the fact that GPIF will sell local bonds and fill portfolio shares , it will also increase in the portfolio and the share of foreign securities. Experts suggest that the amount of such investments will be between $ 200 billion to $ 400 billion

Do not forget about the European Central Bank, which may soon decide to scale stimuli , whether full QE or some kind of program LTRO. If Mario Draghi still launch incentive program, together with the pension fund of Japan in world markets appear fresh billions that will continue to push up quotes .