The Ambassador for International Financial Cooperation Choi Jong-gu (former Chairman of the Financial Services Commission), visited Tokyo, Japan, from March 31st to April 1st. Ahead of Korea’s official inclusion in the World Government Bond Index (WGBI) this November, he briefed major Japanese investors on the foreign exchange (FX) and capital market reforms pursued by the Korean government and reviewed their evaluations and responses.
* World Government Bond Index (WGBI): A leading index that includes government bonds from 26 major countries. With an estimated $2.5 trillion in assets tracking this index, it is the largest global bond index.
First, Ambassador Choi met with the Chief Investment Officer (CIO) of Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund and a major tracker of the WGBI. He provided a detailed explanation of Korea’s recent institutional reforms related to government bond investment, including the simplification of tax exemption procedures for government bonds, the introduction of an omnibus government bond account*, and the extension of FX trading hours.
The GPIF described the speed and scope of the Korean government’s FX and capital market reforms as impressive, expressing its hope that these improvements would continue in the mid and long term. Both sides also agreed to maintain close communication to reflect the needs of Japanese investors in future regulatory enhancements.
* An omnibus system that allows asset management firms to process transactions collectively on behalf of sub-funds.
In addition, Ambassador Choi met with major investors, including the CEO of Mitsubishi UFJ Asset Management and the CIO of Resona Asset Management, to discuss Korea’s political and economic landscape as well as recent institutional reforms related to government bond investments. Japanese investors assessed that the recent regulatory improvements have significantly enhanced the environment for investing in Korean government bonds; if market openness continues to expand, they said they will increase their investments in Korea over the long term.
Ambassador Choi confirmed the positive response from Japanese investors regarding Korea’s efforts to improve its capital and FX market infrastructure during his visit to Japan. Leading up to Korea’s official inclusion in the WGBI this November, the government plans to maintain close communication with global investors, actively promote the regulatory improvements, and continuously monitor and refine the measures to ensure they function smoothly in practice without causing inconvenience to government bond investors.
Please refer to the attached files.
