Japan pension funds’ flight overseas posing challenges

Japan’s corporate pension funds are abandoning the safe harbour of Japanese government bonds (JGBs), but in their search for more attractive yields and greater diversification they must increasingly consider new challenges such as currency risks and spreading economic weakness. While Japanese corporate pension funds have increased their share of alternatives investments, their allocations to JGBs have plummeted to 18.1% from 30.3% four years ago, shows an annual survey* by JP Morg…