Shinzo Abe will call on Japan’s giant pension funds to lift their allocations to domestic stocks and take a more active approach to investment, as the prime minister seeks to sustain interest in the world’s second-biggest equity market.

As part of an eagerly-awaited growth strategy the Government Pension Investment Fund and other institutional investors will be urged to lift automatic caps on equity holdings while exercising voting rights more frequently, according to a senior government official.

Mr Abe’s growth strategy is the “third arrow” of an economic revival plan that began with a Y10tn ($99.8bn) supplementary budget and a much more aggressive monetary policy regime at the Bank of Japan. The prime minister will sketch out the framework of the growth strategy in a speech today. The details will be finalised ahead of Cabinet approval next week.