The world’s biggest pension fund posted a gain for a fourth consecutive quarter, with foreign stocks providing the best return among assets amid a thaw in trade tensions between the U.S. and China.

Japan’s Government Pension Investment Fund returned 4.6%, or 7.4 trillion yen ($67 billion), in the quarter ended Dec. 31, with assets totaling 168.9 trillion yen, it said Friday in Tokyo. Foreign stocks were the fund’s best performing investment, gaining 9.7%, while domestic equities added 8.6%. The return was 0.9% for overseas bonds, while Japanese debt incurred a 1% loss.

Domestic debt holdings had their worst performance in more than a year as progress in U.S.-China trade negotiations encouraged investors to shift toward Japanese and foreign equities, while strength in foreign currencies against the yen supported the value of overseas debt. “The performance was the result of the yen’s weakness and rising stocks, but the question is what happens from here,” said Kiyoshi Ishigane, the chief strategist at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo.

“A weaker yen would help domestic equities, but it’s hard to expect the currency to drop further. Compared to last year, things will get tougher.” During the October-December quarter, the MSCI All-Country World Index of global stocks rose 8.6% and the S&P 500 Index gained 8.5%, while the Topix index advanced 8.4%. Yields on 10-year U.S. Treasuries climbed 25 basis points in the period, while benchmark Japanese government bonds yields added about 20 basis points. Japan’s currency weakened 0.5% against the dollar and slid 3.3% against the euro.

“Progress made in the U.S.-China trade negotiations supported domestic and foreign equities,” wrote Norihiro Takahashi, the president of the pension fund. “Interest rates rose globally, while the yen weakened against the dollar and the euro.” The GPIF announced in October that it would give itself leeway to buy more fixed-income securities from outside its home market by classifying currency-hedged foreign bonds as part of its domestic debt.

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