Daily Management Review

Japan to invest in US infrastructure


02/02/2017


The world's largest pension fund GPIF (Government Pension Investment Fund of Japan) is going to invest in infrastructure projects in the United States.



japanexperterna.se
japanexperterna.se
GPIF’s investment in US infrastructure in the framework of economic cooperation will be discussed next week at a meeting of Prime Minister of Japan Shinzo Abe and Donald Trump in Washington, according to Nikkei. The Japanese government in Washington will be presented by Foreign Minister Fumio Kishida and Minister of Economy, Trade and Industry Hiroshige Seko.

The stated goal - to create "hundreds of thousands of jobs in the US" - corresponds to Trump’s political objectives is meant to strengthen ties between the two countries. An untold ambition is to avoid a situation in which Trump would call Japan currency regulator, which, in turn, would threaten the Japanese experiment with control of the yield curve.

Earlier, during a meeting with heads of pharmaceutical companies Trump said that China and Japan are engaged in "planning of money market", perhaps implying manipulation.

"I would like to discuss contribution (of Japan) in increasing productivity and competitiveness in the industrial sector of the US ... including assistance in development of infrastructure," - said Abe on Wednesday.

As Nikkei notes, GPIF, using the Japanese pension funds, will acquire US corporate bonds to finance infrastructure projects. Up to 5% of about 130 trillion yen ($ 1.14 trillion) assets controlled by the pension fund may be invested in foreign infrastructure projects. The fund only invests tens of billions of yen in this asset class.

Government Pension Investment Fund of Japan in July-September earned on investments 1.8%, or 2.4 trillion yen, having increasing the assets to 132.1 trillion yen. Investments in Japanese and foreign stocks brought 3.1 trillion yen to the fund, as prices for these securities recovered after a drop caused by the decision of the UK to leave the EU. This offset losses on the bonds in the amount of 706.9 billion yen.

During the previous three quarters, the fund lost more than 15 trillion yen. Fund losses exceeded the investment income received in October 2014, when it revised its strategy by increasing the investments in shares and reducing the purchase of bonds.

source: nikkei.com






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