Japan's Bond Meltdown Spurs Questions Over $1.8 Trillion Pension Giant's Next Move

Investors gaming out how Japan can calm its volatile bond market and prop up the yen see a possible answer in the $1.8 trillion Government Pension Investment Fund.

As one of the world’s largest pension funds — and a trend setter for other Japanese institutions — the GPIF could help arrest the spike in yields by increasing its asset allocation to the country’s government bonds, they say. The shift would be coupled with a reduced target for holdings of foreign bonds, notably US Treasuries, in the process easing selling pressure on the Japanese currency.