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Japan’s pension fund lost 5.65 trilion yen in fiscal 2007

July 4, 2008
By Ken Worsley


As a quick follow-up to yesterday’s post on the creation of a sovereign wealth fund and the taking of seed money from Japan’s pension fund, it was announced today that the Government Pension Investment Fund lost 5.65 trillion yen in fiscal 2007. Although estimates had been published before, this is the first time we’ve seen detailed numbers from the government.

As one would expect, the fund made money from its investments in domestic government bonds, but lost about 7.5 trillion yen in equities positions both at home and overseas. This was the largest loss ever incurred by the pension fund, which has been investing full-scale in financial markets since 2001.

Filed Under Equity Markets, Finance, Fiscal Policy, Politics 

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Comments

7 Responses to “Japan’s pension fund lost 5.65 trilion yen in fiscal 2007”

  1. Bookmarks about 2007 on August 17th, 2008 4:26 pm

    […] - bookmarked by 4 members originally found by SasukeXluversXunite on 2008-07-27 Japan’s pension fund lost 5.65 trilion yen in fiscal 2007 […]

  2. JREITs down too low « Eastedge Partners, Japan Real Estate Advisors on September 16th, 2008 5:50 pm

    […] aren`t the Japanese pensions and pensioners figuring this out?  The govt pension lost 4% last year, right? You would think the pensions would be the most natural investor to prop up their own country`s […]

  3. Japan’s public pension fund lost a record 10.17 trillion yen in fiscal 2008 Japan Economy News & Blog - Business, Economy, Real Estate, Marketing and Economic Reports on August 6th, 2009 12:19 am

    […] pension system managed to log losses. In FY2007, the fund earned money on government bonds, but lost a whopping 7.5 trillion in in equities positions. The total FY2007 loss, 5.65 trillion yen, was the largest on record. Until fiscal […]

  4. Matt on August 6th, 2009 9:46 am

    Ken:

    Any idea which proportion of losses were due to exchange rate losses v. capital depreciation in those risky assets? I think that the yen gained about 10 percent in 2007. 2008 is even worse, with the yen gaining between 15 and 20 percent (yeah, I’m too lazy to retrieve the exact numbers, but those are close estimates).

    Did the fund simply take too much risk? Or, is the fund (*tin-foil-hat*) used politicially to supplement the official reserves in exchange rate manipulation (i.e., chasing certain assets abroad when domestic assets would have made more sense)?

  5. Matt on August 7th, 2009 10:57 am

    Ah darn. I meant to post that in the new one. :D

  6. Ken Worsley on August 7th, 2009 12:16 pm

    Matt, that’s what I was wondering. Should I paste it over there?

  7. Japanese public pension fund = bagholder « Wasatch Economics on September 5th, 2009 1:49 am

    […] pension system managed to log losses. In FY2007, the fund earned money on government bonds, but lost a whopping 7.5 trillion in in equities positions. The total FY2007 loss, 5.65 trillion yen, was the largest on record. Until fiscal […]

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