TOKYO/SHANGHAI—Japan’s Government Pension Investment Fund (GPIF) will not invest in Chinese government bonds due to settlement and liquidity issues, even after they will be included in a major bond index next month, it said on Wednesday. The world’s largest pension fund, with total assets of 193 trillion yen ($1.729 trillion), said it will stay out of yuan bonds after FTSE Russell’s World Government Bond Index (WGBI) starts to include Chinese bonds from October. Masataka Miyazono, president of GPIF, cited three reasons why the the fund thinks investing in Chinese bonds would be risky for a large investor like the GPIF, in minutes of its board meeting held in July. The minutes were published on Wednesday. “Chinese government bonds cannot be settled in an international settlement system that can be used for other major government bonds. The market’s liquidity is still limited compared with the size of GPIF’s investment scale. Trading …