By Muskan Arora

Japan’s Ministry of Health, Labour and Welfare is appointing
Kazuto Uchida head of the Government Pension Investment Fund, effective April.
1.

Uchida, a former economist for Mitsubishi UFJ Financial
Group Inc., will assume a five-year term managing the US$1.72T pension fund —
one of the world’s largest — on the departure of its current President Masataka
Miyazono.

In his new role, Uchida will be tasked with achieving
returns while managing risks at a time when Japan’s population is aging while
inflation raises living costs. According to a report by Bloomberg in
December, the ministry has proposed a target yield for the GPIF of 1.9
percentage points above wage growth rate, up from 1.7 percentage points. It also
noted the pension fund will review its portfolio strategy for the next five
years by the end of March.

Most recently, the plan disclosed a list of money
managers hired in the current fiscal year, including J.P. Morgan Investment
Management, Epoch Investment Partners, and Acadian Asset Management among others, of which most newcomers on
the platter are overseas equity managers.

The appointment brings in speculation of changes in the
current portfolio allocation which includes domestic stocks, foreign stocks, domestic
bonds and foreign bonds.

At its last review in 2020, the fund hiked its allocation to
foreign bonds and reduced allocation to domestic bonds.

Prior to joining the fund, Uchida held roles including
member of the board of directors at MUFG Americas Holding Corp. and its primary
subsidiary MUFG Union Bank.