Japan's public pension fund reportedly logs massive loss in FY 2015

Japan's government pension fund has suffered a massive loss of more than 5 trillion yen (48.6 billion dollars) in fiscal 2015 for the first time in five years, local media reported.

The loss was incurred largely due to a fall in the stock market as the fund has been shifting its assets from low-yielding bonds to riskier stocks since October 2014 as part of Prime Minister Shinzo Abe's growth strategy, said Japan's Kyodo News.

The 140-trillion-yen Government Pension Investment Fund (GPIF), the world's largest of its kind, decided in October 2014 to increase its allocation to domestic and foreign equities from some 24 percent to about 50 percent of the portfolio, while cutting its allocation to domestic bonds by nearly half to 35 percent.

The reallocation, aiming at paying the soaring pension bill and relieving pressure on the public budget, however, has also raised concerns on financial safety, especially after it logged a loss of some 7.9 trillion yen for the second quarter of fiscal 2015 following the turbulence in global stock market.

The GPIF, supervised by the Ministry of Health, Labor and Welfare, has not confirmed the 5-trillion-yen annual loss, as it has delayed releasing its annual investment performance report from early July to July 29, saying it is taking the time to prepare for report on a detailed stock portfolio.

The main opposition Democratic Party, however, criticized the government for delaying the report so as to minimize its negative impacts on the July 10 Upper House elections.

Japan's upcoming Upper House elections, with half of the 242 seats up for grabs, are also seen by many as a referendum on Abe's faltering economic policies. Enditem