Japan urges pension funds to boost domestic holdings

The Japanese government is calling on the nation's pension funds, including the world's largest, to significantly increase their investments in domestic financial assets. Finance Minister Satsuki Katayama made the announcement on Friday, July 10, 2026, stating the government aims to encourage "substantially greater" allocations to Japanese assets. The move immediately lifted the yen from near 40-year lows and triggered a rally in Japanese government bonds, which had been under severe pressure.

The announcement is seen as an effort to stabilize financial markets after weeks of investor anxiety. Concerns over the Takaichi administration's expansionary fiscal policies and fears of political interference in the Bank of Japan's monetary independence had sparked a selloff in Japanese government bonds, pushing yields to multi-decade highs earlier in the week. Katayama's comments helped reverse that trend, with the benchmark 10-year bond yield recording its steepest drop in a month. The yen firmed, rising about 0.5% to approximately 161.45 per U.S. dollar following the remarks.

Economy Minister Minoru Kiuchi sought to further calm markets on Friday by reaffirming the government's...