Nippon Life plans to increase yen bond holdings in Oct-March
25/10/2023 11:46
By Tomo Uetake
TOKYO, Oct 25 (Reuters) - Nippon Life Insurance 8157.T
plans to increase holdings of Japanese government bonds (JGB)
and foreign corporate bonds, with interest rates converted to
Japanese yen through currency swaps, in the remaining fiscal
year through March, an investment planning executive said on
Wednesday.
Although JGB yields are at their highest levels in a decade,
now is not the time to buy aggressively since there is a chance
for yields to go higher, Akira Tsuzuki told a news conference
held to discuss the insurer's investment plans for the second
half of this fiscal year.
Regarding the purchase of super-long JGBs, Tsuzuki said
there was "essentially no change to our investment stance to
primarily buy 30-year bonds," and clarified that there were no
plans to expand the target.
Japan's largest private insurer said the company had started
off the first half of the fiscal year purchasing super-long JGBs
at a restrained pace, but has since seized the chance to
increase purchases following the rise in yields after the Bank
of Japan (BOJ) adjusted its yield curve control policy at its
July monetary policy meeting.
The company has caught up to the "average pace" of
purchasing, which is calculated by evenly dividing the annual
purchase amount, he added.
The 30-year JGB yield JP30TB=JBTC last stood at more than
1.8%, rising to its highest level in 10 years.
While Tsuzuki said the current yield is "close to our cost
of debt (about 1.9% on average) and good in terms of absolute
level," it's still "not the time to buy aggressively" given the
possibility that yields will climb higher, depending on rises in
U.S. interest rates and changes to domestic monetary policy this
fiscal year.
Nippon Life's base forecast, however, is for the BOJ to
begin to normalise policy between April and September next year.
Nippon Life holds 74.5 trillion yen ($500 billion) of assets
under management as of end-March.
($1 = 149.92 yen)
(Reporting by Tomo Uetake; Writing by Brigid Riley; Editing by
David Holmes)
((brigid.riley@thomsonreuters.com))