Japan Will Invest Its Pensions In US Infrastructure To Create "Hundreds Of Thousands Of US Jobs"

Tyler Durden's picture

Having decided to actively increase its risk exposure over the past few years, including venturing into high beta stocks and junk bonds - a gamble that has lead to a big jump in quarterly volatility not to mention significant downside risk should global markets suffer a crash - Japan's Government Pension Investment Fund, or GPIF, the world's largest pension fund, has decided to invest in US infrastructure projects next.

According to Japan's Nikkei, infrastructure investments in the U.S. by Japan's GPIF will feature heavily in the economic cooperation package to be discussed at next week's summit in Washington between the two countries' leaders. The stated goal is to create "hundreds of thousands of American jobs", in keeping with U.S. President Donald Trump's agenda, and deepen ties between the two countries. The unstated goal is to avoid Trump lashing out at Japan as a currency manipulator, and putting in peril Japan's QQE "with curve control" experiment, which is the bedrock of all Abenomics (as further expained in the following Nikkei piece). 

Japan has grown nervous that after Mexico, China and Germany, it may be next nation to find itself in Trump's spotlight, something Trump hinted at yesterday during his meeting with pharma CEOs when he said that "other countries take advantage of America by devaluation," and then directly named China and Japan as "planning money markets," presumably implying manipulation. 

As such, Japan's prime minister may be simply offering up billions in pension fund capital as a source of capital for the upcoming Trump infrastructure projects to placate the president and avoid a far more dire outcome, should Trump launch currency or trade war with Japan. Whatever the logic behind Abe's thinking, new cabinet-level talks discussing trade policies and economic cooperation agreements are also on the table.

Japan's contingent headed to the US would likely include Finance Minister Taro Aso, Economic Minister Hiroshige Seko, and Foreign Minister Fumio Kishida, the Nikkei reported. The U.S. is expected to send incoming Commerce Secretary Wilbur Ross and incoming U.S. Trade Representative Robert Lighthizer to that meeting. Japanese Prime Minister Shinzo Abe and Trump will aim for agreement on that framework during their Feb. 10 meeting.

"I wish to discuss [Japanese] contributions toward improved productivity and competitiveness in the entire U.S. industrial sector, or a large framework that includes aid for infrastructure development," Abe told members of the lower house Wednesday. His government has started to lay out a comprehensive initiative addressing job growth.

The draft proposal will feature infrastructure investments in the U.S. by Japan, joint robotics and artificial intelligence research by the two sides, and countermeasures against cyberattacks.

How will the Japanese megafund alllocate pension capital? According to the Nikkei, the GPIF will purchase debt - using the funds of retired Japanese citizens - issued by American corporations to finance infrastructure projects. Up to 5% of the roughly 130 trillion yen ($1.14 trillion) in assets controlled by the megafund can go toward overseas infrastructure projects. Currently, only tens of billions of yen are invested in that asset class, leaving room for expansion. Additionally, long-term financing for high-speed rail projects in Texas and California would be provided through such avenues as the Japan Bank for International Cooperation.

While we doubt Japanese pensioners are aware that the returns on public infrastrcuture are some of the lowest in the world, if not outright negative, we are confident they will learn soon enough, although since the full IRR will become evident only over a period of years, they may have bigger concerns should the Nikkei and/or global stock markets, where the GPIF is now heavily invested, crash first.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
booboo's picture

Well just look what Hans Gruber did to our healthcare after he blew up Nakatomi Plaza

JamesBond's picture

They just need to invest some Cosplay women in the US. Win - Win.


Shocker's picture

Don't know if thats is winning for not. But either way lets keep the Job comeback news coming. Put America back to work

Winning Job news - http://www.dailyjobfix.com



knukles's picture

This's gettin' bigger and better than the Clinton Global Initiative.

Stuck on Zero's picture

Much of the trade deficit we run with China is actually to Japanese companies operating in China. The cash flows back to Japan ... a country that has never been anyone's ally.

Majestic12's picture

Jap's have no choice.

They're NWO bitches who are now wholly owned...

...by maritime law, of course....

read up...

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) Majestic12 Feb 2, 2017 12:50 AM

If they were wholly owned the Jews would be packing ships full of 3rd world barbarians to their shores.

Bay Area Guy's picture

Oh hell no.  Made my first trip to Japan (other than flying through Tokyo) last September.  I left convinced that cosplay is one of the major reasons for the decline in Japan's birth rate.  Younger women seem to be much more inteersted in dressing up and going out with each other than going out with men.  Of course, the men seemed only interested in working and then drinking and banging (non-cosplay) hookers after work.

knukles's picture

So what's wrong with that?
Some people and indeed entire races have been known to suffer under the umbrage and burden of twisted perverted sexual fetishes.

skirmish's picture

Well, not entirely true. They have their hentia and anime also ;-)

Fathead Slim's picture
Fathead Slim (not verified) booboo Feb 2, 2017 12:44 AM

Yippee kiyay motherfucker.

Thus did Brucie refute Gruber.

The central planners's picture

Whats that money for anyways? Everyone knows japs cant ever retire.

old naughty's picture

but that can be said to everyone...

so never intended to payout no?

King Tut's picture

Japan should just give the $ directly  to the corrupt union honchos, DOT bid riggers and politically connected big contractor owners.

So It Goes's picture

Japan has precisely ZERO natural resources, and needs to export finished products to survive.  That has always been the case.  If USA does not trade - they are done.

So, why not support America - logical choice.  And besides, China is next door and still pretty angry over past atrocities - makes more sense to cuddle up to America.

Trump - winning.

King Tut's picture
King Tut (not verified) So It Goes Feb 1, 2017 9:19 PM

If having abundant natural resources is so great why don't you see innovations out of Africa and the Middle East and South America?  Instead you see it out of resource poor countries like Japan and Germany. It's known as "The Paradox of Plenty"

Kiss_My_Schnitzel's picture

how care there be innovations in Africa, Middle East and South America when you Anglo Saxon imperialized those countries and overthrow their governments with dictators everytime they want their country back?

So It Goes's picture


It is not mutually exclusive.

You can have genius worker-bees, but if they have nothing to work on, they have nothing.

You can have all the natural resources, but if you don't have a population who knows how to exploit it, you also have nothing.

You need a combo of the two - USA excels at this.

MEFOBILLS's picture

If having abundant natural resources is so great why don't you see innovations out of Africa and the Middle East and South America? 



It is because of IQ.  The races are not the  same.  In Brazil, the industrial corridor around Sao Paulo is populated by Japanese and Germans.  You don't think that the natives can invent jet airplanes like Embraer?

The vast bulk of invention in the world can be defined by a a line somewhat to the east of Germany, then Westward toward Skandinavia, and also encompassing Great Britain.

Russia has people groups similar to the area described so also comes up with innovation.

It is absolutely the case, that island nations need earth, to then fashion into goods.  Those goods then make prices.  Said prices fetch dollars, which they can use to buy oil.  The oil in turn fuels industry, to then make goods.

The paradox of plenty... give me a break.  The U.S. has plenty of resources, including being blessed by natural tributaries, and plenty of access to the ocean.  Why isn't it poor?

Paradox of plenty... some economists are complete retards.

Japanese are excellent engineers, have good art, and high culture.  Hitler called them honorary Aryans out of respect for their inherent ability.  You could drop Japanese people anywhere in the world, and they would thrive.

Please... give me an example of Japanese underperformance due to being in a country with plenty.  LoL

BeanusCountus's picture

You are right. Donald is winning.

The central planners's picture

We past that, now we are spinning.


Fuck them, and fuck their money.

All that will happen is every road, bridge and parking lot will turn into toll heaven for the Rising Sun Corp, at our expense, on top of interest payments on the bonds to float construction projects. 

Go fall on your swords, you Tepco lookalike motherfuckers.


Orly's picture

Governor Perry, is that you?

DennisR's picture

No Thanks. 

Trump will be investing in that already. 


Escrava Isaura's picture

Not enough because the rich Americans don’t like “subsidies” competition, meaning, Trump can’t put too much funds on the less educated Americans. We need that funds to ourselves.



mary mary's picture

Smart.  Very smart.

Wild Theories's picture

if you mean smart is the man who knows how to get on his knees and suck dicks whilst slupring "thank you for giving me the opportunity to taste your cock", then yes Abe is very smart indeed

LetThemEatRand's picture

I remember reading a few months ago that Obama said words to the effect of "okay, Trump.  Good luck waving a magic wand and creating US jobs."  Apparently not being a sniveling idiot diplomat and instead engaging in plain talk is a magic wand.

Orly's picture

Wingardium jobiosa...


Creative_Destruct's picture

LTER: "Apparently not being a sniveling idiot diplomat and instead engaging in plain talk is a magic wand."

Yep. But according to the Deep state and the MSM it's such a lewd-crude-unconventional-dude-approach, Trump's transactional method should never work.

Bullshit. It has worked for him and it will keep working. He finds ways around problems because he's had to get RESULTS in business. The sniveling diplomats only have to smooze and manipluate public perception and pander to the press.

Yes, these establishment guys will be all in an indignant huff about this for awhile. Then the fact that they like money and the benefits of interaction with the US more than they dislike Trump's approach.

Lynx Dogood's picture

Holy crap!!!!!!!!  Who's going to be next?

TXPatriot_73's picture

How about a Nobel Peace Prize for Trump? He may have just negotiated a deal between Japan and Russia that haven't had a peace treaty signed in over 70 years, and this is Japan's way of saying thanks. 

Thorny Xi's picture

Hope you like toll roads - those retirees need 8% roi

Fiscal Smegma's picture

Japs are WISE to invest in the US and TRUMP

The central planners's picture

Wise to invest in a totally fucked up country with 20 trillion in debt and exponentialy growing? Poor naive to beleive that Trump will avoid the outcome of 100 years of monetary irresponsability.

1980XLS's picture

The last time, they invested in US, West coast RE, things did not end well.

They should probably just sell more Sony Walkmans





----_-'s picture

"Japs are WISE to invest in the US and TRUMP"



you did it! you made me laugh loud

thats the first time this year someone made me laugh loud


you need to start a career as a comedian

WillyGroper's picture

moonbeam can tell ya all about this as he's a beneficiary.

yttirum's picture

Japan has already been dug in around Texas for the high speed rail. There was a judge or two who said it was more of a land grab by the Japs and American cohorts than a rail project. They were designating huge areas of land for imminant domain that, in their own words, might not need to be used for the project. If you are interested, seach words: Japan texas rail land grab, Japan Texas high speed rail, judge speaks out against japanese Texas land grab for rail project.

That's probably why Kerry got brought in. To help the Japanese snag up that land.

hotrod's picture

Just print the money we got the strongest currency.  Run the dollar up to 110 and then announce 2 trillion in infrastructure.  Dollar drop back to 100 big deal. 2 trillion ought to enhance the mid term elections and maybe carry Trump to next election.  Better to borrow from the Fed than pay the Japs 8%.  Fed can do 100 year loans at 1%. Isn't the Yen sort of a worthless currency outside Japan?

MEFOBILLS's picture

This is true.

A continental country with its own resources, does not need another countries "credit."  They have their own money, to then print up, to then direct labor energy.

Just don't make so much money that it leads to inflation.  Loans recall credit.  Taxes recall floating money (debt free).

The Fed isn't needed either, it is a waste of space.

All banks should be gyro, like most people think they are, but aren't.  That means banks loan out money that has been saved by savers.  Banks should not create new credit for the commons.  A third party acts as a parasite.