According to the Securities Times app, Japan's Government Pension Investment Fund (GPIF) suffered its largest loss since 2020 in the third quarter of 2024, primarily due to the yen's rebound resulting in reduced overseas securities income and a decline in the Japanese stock market. As one of the world's largest national pension funds, GPIF incurred losses in three of its four asset categories - foreign stocks and bonds, as well as Japanese stocks, with only domestic debt achieving positive returns. This loss situation may reduce market expectations for GPIF to increase its stock holdings next year to enhance overall returns when devising a new investment portfolio model.

Figure 1

Financial analyst Hidenori Suezawa from Mitsubishi UFJ Morgan Stanley Securities points out that GPIF had already begun increasing its domestic stock holdings before official policy changes in order to enhance its domestic stock allocation target. However, the current performance results do not indicate a reimplementation of this strategy.

As of September, GPIF's total assets amounted to 248.2 trillion yen (approximately $1.6 trillion), with a loss rate of 3.6%. Japanese bonds in its investment portfolio increased from 25.85% in June to 26.74%, while the share of domestic stocks decreased from 24.37% to 23.98%.

The weakening of the currency against the yen had a negative impact on overseas investments, with stocks declining by 5.4% and bonds by 5.5%. Meanwhile, the Japanese stock market fell by 4.9%, while domestic bonds rose by 1.4%.

Figure 2

In the global market, the MSCI Global Stock Index rose by 6.2% in the third quarter, the S&P 500 index increased by 5.5%, and the TOPIX index fell by 5.8%. The yield on 10-year US Treasury bonds decreased by over 60 basis points, while the benchmark Japanese bond yield dropped by nearly 20 basis points. Additionally, the USD to JPY exchange rate fell by 11%.