Japanese Investment Trends: GPIF, Foreign Flows, and Bond Market Shifts

No clear signs of marked changes in GPIF’s portfolio so far
1. February’s foreign portfolio flows and January’s BOP

No clear signs of marked changes in GPIF’s portfolio so far

February’s foreign portfolio flows and January’s BOP

In February 2025, Japanese investors net purchased JPY3.0trn ($19.5bn) of foreign securities, the largest amount since last August. The main contributors were net purchases of foreign bonds by pension funds and banks.
Banks net purchased the largest amount of foreign bonds since last August, with long-term US Treasury yields declining.
Trust accounts (pension funds) net purchased foreign bonds and likely have rebalanced their portfolio allocations, with the yen appreciating. Our estimate of the GPIF’s latest allocation showed no clear signs of marked changes in the fund’s portfolio before its new medium-term plan takes effect from April 2025.
Investment trusts’ net purchases of foreign equities declined significantly from January even after taking account of their seasonal patterns.
Lifers net sold foreign bonds for four consecutive months. With long-term JGB yields reaching their highest level in about 15 years, they may have gradually shifted their funds from foreign bonds into domestic bonds.
Overseas investors net sold the largest amount of Japanese equities in five months. Rising JGB yields and concerns over US tariffs might have encouraged them to reduce their exposure to Japanese stocks.
Japan’s balance of payments data for January showed the current account surplus declined to less than JPY2trn, though we believe this fall is temporary due to the timing of the Chinese New Year holidays.

japanese investment trends gpif foreign flows and bond market shifts grafika numer 1 ✕

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