By Anna Kitanaka Oct 20, 2014
Japanese shares surged, with the Topix (TPX) index climbing the most in more than a year, after a rebound in global equities and a report the nation’s pension fund will boost domestic stock holdings.
The Topix jumped 4 percent to 1,224.34 at the close of trading in Tokyo, the most since June 2013. Some 1,802 stocks on the first section of the Tokyo Stock Exchange rose, the most on record, according to the bourse. The measure lost 12 percent the past three weeks, meeting the common definition of a correction. The Nikkei 225 Stock Average added 4 percent to 15,111.23 today. The yen lost 0.4 percent to 107.27 per dollar after dropping 0.5 percent on Oct. 17.
Japan‘s $1.2 trillion Government Pension Investment Fund will increase its allocation target for local shares to about 25 percent from 12 percent, the Nikkei newspaper reported without attribution. GPIF will also boost its holdings of foreign bonds and stocks to about a combined 30 percent from 23 percent, while reducing domestic debt to the 40 percent level from 60 percent, the Nikkei said Oct. 18.
«Twenty-five percent is more than the market expected,» said Kenji Shiomura, a Tokyo-based senior strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. «They probably can’t buy all the Japanese stocks they need to get to 25 percent by the time they announce it. However, it wouldn’t be a surprise if they’ve already started moving bit-by-bit.»