U.S. assets will be the biggest benefactor of the Japanese Government Investment Pension Fund's (GPIF) decision to more than double its target allocation of foreign stocks to 25 percent, analysts say.
The changes to the $1.1 trillion pension fund coincided with the Bank of Japan's shocking decision to ramp up stimulus on Friday, which sent global equity markets soaring.
"The shift for international equities going to 25 percent of pension fund holdings is fairly big news," said Tobias Levkovich, chief equities strategist at Citigroup in a note published on Friday.
"It establishes a new incremental buyer of shares and the U.S. should be a significant beneficiary," he said.
The overall contribution to non-Japanese stocks could approach $60 billion of new purchases, half of which could go to the U.S. by the end of 2015, said Citigroup's Levkovich, noting that stocks on Wall Street should start to feel the benefit this year.
"Foreign investors typically buy large cap stocks which have greater index impact," he said. "Thus, one cannot ignore the possibility that stock prices jump above our year-end 2014 S&P 500 target on this news."