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Economy

Japan pension fund's stock market assumptions questioned

TOKYO -- The managers of Japan's huge Government Pension Investment Fund must have their heads in the clouds to expect domestic shares to return an impressive 6% a year, some observers say.

    The $1 trillion fund's new medium-term investment plan, released at the end of October, assumes that economic growth and other macroeconomic conditions will resemble the Japan of 1983-93. But its expected nominal return on Japanese equities is based on corporate earnings from 1983 to 1989 -- the high-flying years before the nation's asset-price bubble burst.

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