Headlines from the head of the Japan reform panel.

  • Expects GPIF and public pension fund reform proposals to be implemented by spring
  • GPIF should consider diversifying investments into areas such as private equity, infrastructure and reits
  • GPIF should consider adopting ROE-based benchmark for passive investment in domestic equities in near term
  • GPIF should consider investing in inflation linked JGB’s
  • GPIF and other public funds should change current JGB-heavy investment strategy
  • Whether final reform report will be implemented depends on political will

The report is pretty much in line with the expectations that Mike posted earlier.

Last week Nikkei inc and the Japan exchange group announced a new index which will open in January. It is thought that the huge pension companies would be switching into this as a means of getting into higher return investments. It’s another part of Abenomics to get firms investing ‘outside the box’ and to spur demand and growth within Japan. Pension companies typically keep their investments low risk and this has been one of the stagnation factors in Japan.

Further details of the new index can be found here courtesy of the WSJ (ungated) h/t Thelma