* Sticks to full-year plan to invest 70 bln yen in foreign
* Slightly increases 'open foreign bonds'
* Will continue to invest in Japanese corporate debt
By Ayai Tomisawa
TOKYO, Oct 7 Japan's Mitsui Sumitomo Insurance
Co bought over 30 billion yen in overseas assets in the first
half and will maintain its plan to invest in foreign assets for
now because of record-low Japanese debt yields, a senior
executive said on Friday.
The core company of MS&AD Insurance Group Holdings,
which had 6.8 trillion yen in total assets as of March 2016,
plans to invest a total of about 70 billion yen in foreign
assets such as bonds, stocks and private equity commitments this
financial year through March 2017, Hiroaki Hara, manager of
investment planning at Mitsui Sumitomo, told Reuters in an
"Open foreign bonds" - foreign bonds bought without currency
hedging - account for about 35 billion yen of the total foreign
"We are slightly increasing open foreign bonds, but we don't
want to increase dramatically because foreign bond yields are
not that high, either," Hara said.
With Japanese government bond yield falling to record lows
under the Bank Of Japan's negative interest rate policy, the
insurer plans to keep its domestic bond assets flat this year.
Instead, the insurer will stick to its plan to invest about
80 billion yen in Japanese corporate debt for this fiscal year,
roughly the same as the previous year, Hara said.
The BOJ surprised markets by introducing measures to control
the yield curve in its last policy meeting on Sept. 21 and said
it would aim to keep the 10-year government bond yields at
around zero percent.
"Our plan to refrain from buying 10-year JGBs hasn't
changed. Despite the BOJ's new policy, the yields are trading in
negative territory anyway," Hara said, tipping the 10-year JGB
yield to trade between 0.05 percent and minus 0.15 percent
during the second half.
The 10-year Japanese government bond yield
fell to a record low of minus 0.300 percent in early July,
flattening the yield curve. It has moved between 0.005 percent
and minus 0.090 percent since the BOJ's latest measure.
On Friday, it was at minus 0.065 percent.
Hara expects the Nikkei share average to trade
between 15,500-18,000 in the Oct-March period, compared with
16,847.11 by 0400 GMT on Friday.
Mitsui Sumitomo Insurance plans to cut holdings of domestic
stocks as it is in the third year of a four-year plan to reduce
such exposure by a total of 500 billion yen.
Many Japanese insurers have been slowly unwinding their
cross-holdings of shares, recognising the risk they pose to
their financial health.
(Editing by Shri Navaratnam)