Japan's GPIF Set to Participate Directly in Government Bond Auctions
Moves are in progress to enable Japan's Government Pension Investment Fund (GPIF) to participate directly in government bond auctions, according to sources familiar with the matter.
Currently, GPIF purchases Japanese government bonds (JGBs) from auctions through securities companies. To facilitate GPIF's direct participation, the Ministry of Finance will amend the government ordinance defining JGB auction participants.
After the ordinance is amended, GPIF will join the network handling JGB settlements with the Bank of Japan. It is anticipated that GPIF will qualify for participation as early as spring this year.
The change will simplify GPIF's portfolio rebalancing and reduce the risk of its investment activities being disclosed to external parties.
GPIF and Ministry of Finance officials declined to comment on the matter.
As of January, 220 entities participated in government bond auctions, including financial institutions, banks, and insurance companies. The modification will add GPIF to this group, facilitating the fund's investment management.