April 27, 2018 / 5:50 AM / 7 months ago

TABLE-Japan insurers plan to step up foreign bond investment in 2018/19

    TOKYO, April 27 (Reuters) - Japanese life insurance companies plan to increase investment in
foreign bonds in the year to March, but with the cost of dollar hedging rising, some are
considering reducing currency hedge while also looking at other options such as buying more euro
debt or higher-yielding credit products in the United States.
    Following is a summary of the investment plans of Japan's biggest life insurance companies
for the financial year to March 2019, based on interviews with Reuters and news conferences this
month. For stories on each company's investment plans, see         

FOREIGN BONDS
----------------------------------------------------------------------------------------
Nippon Life    to increase bonds without FX hedge, shift to US corp bonds from FX-hedged Tsys
Dai-ichi       unlikely to increase FX-hedged bonds, may buy unhedged one if dollar at Y100-105
Meiji Yasuda   to increase FX-hedged bonds, to slightly increase unhedged bonds
Sumitomo       to increase holdings, may reduce FX hedge if yen strengthens
Mitsui         to reduce FX-hedged bonds; to increase unhedged bonds by over Y240 bln
Taiyo          to increase holdings with focus on non-government debt
Daido          to increase holdings, shifting to Europe and reducing FX hedge on dollar bonds
Fukoku         to invest 220 bln yen in open foreign bonds
Asahi          to invest 100 bln yen in open foreign bonds
Japan Post     to raise FX-hedged bonds, incl US corp, peripheral euro; keeps unhedged ones flat

JAPAN BONDS
---------------------------------------------------------------
Nippon Life    holdings to be flat or increased, to buy super-long JGBs if yields above 1 pct
Dai-ichi       likely to see holdings reduced
Meiji Yasuda   to slightly increase holdings
Sumitomo       to increase holdings but limit buying in super-long bonds
Mitsui         to maintain holdings flat, increase credit products and cut JGBs
Taiyo          to trim holdings due to low yields
Daido          to maintain holdings flat 
Fukoku         to reduce its holdings of Japanese government and corporate bonds by 40 bln yen
Asahi          to reduce holdings by 50 bln yen
Japan Post     to reduce holdings, buy super-long JGBs if 30-yr yield rises above 1 pct

JAPAN STOCKS
---------------------------------------------------------------
Nippon Life    to slightly increase holdings
Dai-ichi       to reduce holdings, control positions flexibly depending on market levels
Meiji Yasuda   to slightly increase holdings
Sumitomo       to keep holdings steady
Mitsui         to keep holdings steady
Taiyo          to keep holdings steady
Daido          to increase holdings after rise of Y5 bln in previous financial year
Fukoku         to cut by 10 bln yen
Asahi          to increase holdings by Y10 bln
Japan Post     to keep overall holdings steady, to shift more to in-house investment

FOREIGN SHARES, ALTERNATIVE INVESTMENTS
---------------------------------------------------------------
Nippon Life    to increase foreign stocks, incl private equity and hedge funds
Dai-ichi       foreign stock holdings likely to fall, to increase alternative assets 
Meiji Yasuda   to slightly decrease foreign stock holdings
Sumitomo       to increase foreign stock funds, including private equity
Mitsui         to start alternative investment such as infrastructure funds 
Taiyo          to foreign shares steady, increase alternative investments
Daido          to increase foreign stocks after Y65 bln rise in previous FY
Fukoku         to invest 20 bln yen in foreign stocks 
Asahi          to cut foreign stocks 50 bln yen, to increase alternative investment 70 bln yen
Japan Post     to increase alternative assets, mainly PE and real estate

EXPECTED MARKET RANGES
---------------------------------------------------------------
                 USD/JPY      EUR/JPY       NIKKEI         JGB 10-yr      US 10-yr
Nippon Life     Y100 - 120   Y125 - 145   21,000 - 26,000  -0.2 to 0.2%   2.5 - 3.5%
Dai-ichi        Y100 - 115   Y120 - 150   20,000 - 28,000   0.0 to 0.2%   2.5 - 3.5%
Meiji Yasuda    Y100 - 118   Y125 - 146   20,000 - 24,000  -0.1 to 0.2%   2.3 - 3.3%
Sumitomo        Y100 - 120   Y125 - 150   19,000 - 27,500  -0.1 to 0.2%   2.3 - 3.3%
Mitsui          Y105 - 115   Y130 - 145   22,500 - 25,000  -0.1 to 0.2%   2.8 - 3.6%
Taiyo           Y 95 - 120   Y120 - 150   19,000 - 26,000  -0.1 to 0.1%   2.4 - 3.8%
Daido           Y 98 - 118   Y120 - 143   19,500 - 25,000 -0.05 to 0.15%  2.2 - 3.3% 
Fukoku          Y 98 - 116   Y125 - 145   19,000 - 25,000  -0.1 to 0.15%  2.4 - 3.2%
Asahi           Y100 - 115   Y122 - 140   20,000 - 25,000   0.0 to 0.2%   2.6 - 3.3%
Japan Post      Y100 - 120   Y130 - 150   20,000 - 25,000  -0.1 to 0.4%   2.6 - 3.2%    


 (Reporting by Tokyo Markets Team)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below