Politics plays a role in GPIF’s rejection of Chinese Govt Bonds
Experts believe the Japanese pension fund’s decision will have limited impact on global investors’ appetite for China sovereign papers, and any impact would be felt more in Japan’s public sector.
The political tension between China and Japan cannot be dismissed when it comes to the decision behind the world’s largest pension fund to shun Chinese government bonds, according to some experts.
Japan’s $1.7-trillion Government Pension Investment Fund (GPIF) has decided to exclude CGBs from its foreign bond benchmark, the FTSE Russell World Government Bond Index (WGBI). The WGBI is set to include CGBs starting end-October, over a three-year period.
Incorporating CGBs into GPIF…
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