Japan Post Insurance sees value in shorter-dated bonds as yields rise

Japan Post Insurance

Mon 10:57

By Junko Fujita
TOKYO, Oct 19 (Reuters) - Japan Post Insurance 7181.T said on Monday rising yields had made shorter-dated Japanese government bonds attractive, allowing the insurer to broaden its focus to JGBs across the maturity spectrum.
        
Hiroyuki Nomura, executive officer at Japan Post Insurance, said that when interest rates were negative, the insurer could only buy longer-dated bonds
"Finally, we see opportunities in the three-year JGBs, the five-year JGBs or those with any maturities," Nomura said
Japan Post Insurance, also known as Kampo, expects the Bank of Japan to raise rates one more time in December, and another in March. That is viewed positively by markets as it signals the central bank is trying to contain inflation
The insurer sees the benchmark 10-year JGB yield JP10YTN=JBTC trading around 3% for the second half of this year, while the 30-year JGB yield JP30YTN=JBTC will be around 4%
The firm in the first half of this year actively sold low-coupon JGBs and bought high-coupon bonds, but the pace of its overall purchases was slower
The pace could accelerate in the second half as the insurer has become better able to assess risks, while communication between the BOJ, government and markets has improved, Nomura said.

 (Reporting by Junko Fujita; Editing by Jacqueline Wong)
 ((junko.fujita@thomsonreuters.com;))