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HOME  > Past issues  > 2019 January 30 - February 5  > Japan’s public pension fund records largest-ever loss of 15 trillion yen under Abenomics
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2019 January 30 - February 5 [ECONOMY]

Japan’s public pension fund records largest-ever loss of 15 trillion yen under Abenomics

February 2, 2019
The Government Pension Investment Fund (GPIF) on February 1 announced that in the latest quarter ending December 2018, it recorded its largest-ever investment loss of 14.8 trillion yen.

The Abe government should be blamed for having poured a large amount of public pension funds into the stock market under the “Abenomics” economic policy with the aim of pushing up stock prices.

In October 2014, the Abe government drastically changed the investment composition of the pension fund. As a result, compared to 2012 when the Abe government was inaugurated, the percentage of GPIF’s investment in domestic bonds decreased from 70% to 28%. On the other hand, the ratio of that in corporate stocks more than doubled to 48% from 22%.

The GPIF manages around 150 trillion yen in assets. A one-percentage-point increase in the ratio of investment allocation for stocks leads to expanding the stock market by 1.5 trillion yen. The Abe government’s investment shift to stocks from relatively low-risk assets has caused the massive loss amid the downturn in the stock market.

Japanese Communist Party Secretariat Head Koike Akira later in the same day told the press that the Abe government is responsible for the huge loss in public pension reserves.

Koike pointed out that the Abe government not only increased the GPIF’s investment in stocks, but also put even more pension funds in the stock market at the end of last year as a countermeasure against falling stock prices. He said that this was why the loss has become so huge. Koike noted that Abe has boasted that higher stock prices under Abenomics helped the GPIF generate gains, but the plunge in stock prices has brought about a great loss. He said that this clearly reveals the failure of Abenomics.

Koike said that the government has lost 15 trillion yen in stock investment while cutting down on pension benefits and that this will anger pensioners and the general public. He expressed his determination to hold the Abe government responsible for the loss.

Past related articles:
> Abenomics actually manipulation of stock market [October 19, 2017]
> Abe’s policy to have public pension fund buy more stocks causes huge loss [July 2, 2016]

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