Following last week's signal of releasing domestic investment, Japan's finance minister stated that economic growth may support GPIF in reevaluating asset allocation.

Japanese Finance Minister Kaga Tsuki gave a key statement in parliament on Thursday. She stated that the government's current policy transformation is significantly boosting Japan's potential growth rate, and this positive change will provide strong and rational basis for the Government Pension Investment Fund (GPIF) to adjust its asset allocation and increase holdings of domestic assets in future annual evaluations. Kaga Tsuki pointed out that as the world's largest public pension fund, GPIF evaluates its investment portfolio timely and appropriately each fiscal year based on changes in macroeconomic assumptions. She emphasized that as the government places a major focus on expanding investments, Japan's economy is at a crucial turning point, and the increase in potential growth rate should naturally be a core consideration for GPIF to reassess its domestic and foreign asset allocation proportions. This statement is a deep continuation and theoretical support of her policy proposal from last Friday. Last Friday, Kaga Tsuki expressed for the first time her willingness to encourage the pension fund to increase investments in domestic assets, which instantly ignited market enthusiasm and directly led to significant increases in the yen exchange rate and Japanese government bond prices. However, repositioning a trillion-dollar fund is not a overnight task. As revealed by sources familiar with the matter on Monday, Japanese officials currently do not have immediate plans to make "across-the-board" changes to GPIF's target asset allocation proportions, but rather prefer to make mild and flexible adjustments within the current framework. Under current policy, GPIF allocates its huge funds evenly among four categories: domestic bonds, foreign bonds, domestic stocks, and foreign stocks, each at 25%. For domestic bonds, the fund has a wide deviation range of plus or minus 6 percentage points. Analysts point out that within this 6% deviation range, without disturbing the 25% benchmark allocation, it is enough to quietly guide trillions of yen back into the Japanese domestic financial market without alarming the market. To eliminate international market concerns about government intervention in financial markets, Kaga Tsuki deliberately clarified policy boundaries at the meeting on Thursday, setting compliance red lines: "We will take all necessary measures to actively encourage funds to flow into Japanese financial assets; however, the government must also respect the operational independence of the pension fund, and we will never make any form of administrative intervention or compulsory orders. This, I want to make absolutely clear." In the same parliamentary meeting, in response to the sensitive situation of the yen-dollar exchange rate continuing to be under pressure near the 162 level and increasing volatility, Kaga Tsuki once again sent a strong verbal intervention signal to the market. She firmly stated that in the long run, maintaining Japan's international competitiveness through policy transformation is the cornerstone for sustaining global confidence in the yen. However, facing current irrational fluctuations, she reiterated the Ministry of Finance's bottom line: "In any case, we are prepared to take appropriate action at any time in response to excessive fluctuations in the foreign exchange market." Market analysis believes that from last Friday's "verbal exploration," to Monday's practical solution of "substituting existing deviation space for major allocation changes," to Thursday's systematic statement that rationalizes repositioning through the increase in potential growth rate, the Japanese government is attempting to use a precise combination of policies to maintain GPIF's independence while maximally redirecting trillions of capital back to the domestic market and forming a coordinated effect with verbal interventions in foreign exchange, collectively building a "multifaceted defense line" against yen depreciation.