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Markets may have jumped gun on hopes Japan's Shiozaki will reform GPIF

Published on Sep 3, 2014 11:41 PM

TOKYO (Reuters) - Investors may have jumped the gun when they bought Japanese stocks and sold the yen on news that a proponent of an overhaul of Japan's Government Pension Investment Fund (GPIF) will be in charge of the ministry that oversees the mammoth fund.

The market appeared to take the appointment of Yasuhisa Shiozaki as welfare minister, a portfolio that includes supervision of the country's pension pot, as a step that could lead to more buying of risk assets by the US$1.26 trillion (Sing$1.58 trillion) fund. Japanese shares hit a seven-month high on Wednesday, while the yen neared a six-year low against the dollar.

"When it comes to asset allocation, the market expectations may have gone ahead of the reality," said Nobuhiko Kuramochi, a strategist at Mizuho Securities.

While Shiozaki has said the GPIF's portfolio was too bond-centric, his emphasis has been mostly on strengthening the governance of the fund rather than its asset allocations.

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