Japan’s Government Pension Investment Fund is investing in a private equity fund that’s focused on domestic projects, its first direct investment in the asset class as speculation grows over whether it will channel more money into its home market.

The pension fund, one of the world’s biggest, is putting ¥20 billion ($123 million) into a 10-year fund run by Japanese PE firm Advantage Partners, according to data from the GPIF’s website. A GPIF spokesperson confirmed that was the firm’s first direct investment in a Japan-focused PE fund.

Finance Minister Satsuki Katayama fueled speculation that the GPIF may eventually allocate more to domestic assets when she said earlier this month that the government wants to encourage such action. Prime Minister Sanae Takaichi followed up last week, saying that investing in Japanese assets would help the nation’s economy. A shift to more domestic assets would likely support the sovereign debt market while reducing structural selling pressure on the yen.

The giant pension manager, which held more than ¥293 trillion in investment assets as of the fiscal year ended March 31, has been dividing up its holdings by about 25% each into domestic and foreign stocks and bonds.

The health minister Kenichiro Ueno said that GPIF’s management would take action with a long-term perspective, being mindful of impact on markets and other private-sector activities. He also said that regarding alternative investments, the GPIF will build up investment in domestic projects. The health ministry supervises the GPIF.

In the fiscal year through March 2023, GPIF started investing directly in funds that targeted private equity and other markets. Before that the fund entrusted outside asset managers to make investments on GPIF’s behalf based on management agreements.

The pension fund has previously invested in Japanese PE funds via discretionary agreements that leave investment decisions to asset managers. The GPIF had ¥53.8 billion outstanding in PE funds that it acquired through discretionary agreements, according to the fund’s data.