Japan's GPIF extends losing streak with fourth quarterly loss

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Corrects Dow, Nikkei index performance in paragraph 8

By Makiko Yamazaki

TOKYO, Feb 3 (Reuters) -Japan's Government Pension Investment Fund (GPIF) reported on Friday an investment loss of 1.853 trillion yen ($14.41 billion) for October-December, the fourth consecutive quarter of negative returns, due to falling bond prices in Japan and Europe.

This represents the longest losing streak in two decades for the world's largest pension fund, which is closely watched by global financial markets because of its mammoth size.

GPIF's assets fell 0.97% for the three months ended Dec. 31 to 189.9 trillion yen, it said in a statement. The loss widened from 0.88% in the previous quarter.

The weak performance came as the Bank of Japan's surprise tweak to its bond yield curve controls in December sparked a sell-off in the Japanese government bond market.

A strengthening of the yen against the dollar in the quarter also reduced the value of foreign bond holdings when translated into yen terms.

GPIF's Japanese bond portfolio posted a loss of 1.73%, while its foreign bond portfolio lost 5.33%.

Its foreign stock portfolio posted a loss of 0.05%, while its Japanese stock portfolio gained 3.24%.

During the October-December period, the Dow Jones Industrial Average .DJI rose 15.4%, while Japan's Nikkei stock average .N225 gained 0.6%.

As of end-December, Japanese bonds accounted for 26.07% of its portfolio and foreign bonds accounted for 24.59%. Foreign equities accounted for 24.27% and domestic equities 25.07%.

($1 = 128.6000 yen)

Reporting by Makiko Yamazaki; Editing by Jacqueline Wong, Muralikumar Anantharaman and Jamie Freed


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