Reuters: US Dollar Report: RPT-TABLE-Japan life insurers to buy more yen bonds in Oct-March

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RPT-TABLE-Japan life insurers to buy more yen bonds in Oct-March Oct 31st 2012, 01:33 Tue Oct 30, 2012 9:33pm EDT TOKYO, Oct 31 (Reuters) - Risk-adverse Japanese life insurers plan to shift more funds into domestic government bonds despite dwindling yields in the half-year to March, with the top four planning combined purchases of well over $12.5 billion. Japan's biggest nine life insurers, which have combined assets of $160 trillion yen ($2 trillion) under management, are also looking to allocate some money to U.S., German and other high-rated bonds, though final decisions will depend on yield levels, company executives said in quarterly interviews and briefings. In addition to a long-standing reluctance to venture into riskier assets, the insurers are also keen to reduce a duration mismatch between their assets and longer-dated liabilities, although they say the gap has shrunk considerably after years of aggressive buying in yen bonds. Below is a summary of the investment plans of Japan's biggest life insurance companies for financial half year to March 2013, as obtained by Reuters in interviews and at news conferences this month. FOREIGN BONDS ---------------------------------------------------------------------------------------- Nippon Life plans to increase hedged foreign bonds, may buy unhedged ones Dai-ichi to keep holding steady but will be flexible Meiji Yasuda to cut holdings slightly after an increase of 980 billion in Apr-Sept Sumitomo to keep full forex hedges on foreign bonds Taiyo to keep holdings steady Daido to boost holdings depending on market conditions Fukoku to boost holdings but might fall short of target depending on conditions Asahi to cut holdings by Y60 bln; keep full forex hedging Mitsui to increase bond investment by 30-40 billion yen, including foreign bonds JAPAN BONDS ----------------------------------------------------------------------------------------- Nippon Life to increase holdings by about 450 billion yen Dai-ichi to increase holdings, extend duration Meiji Yasuda to increase holdings by around 600 bln yen Sumitomo to increase holding, mostly 20-year debt Daido to continue purchases, mostly 20-year debt Fukoku to invest around 140 billion yen in FY, mostly long-term debt Taiyo to boost holdings, mostly long-term debt Asahi to increase holding around Y180 bln in yen bonds Mitsui to increase overall bond investment by 30-40 billion yen, including yen bonds JAPAN STOCKS ---------------------------------------------------------------------------------------- Nippon Life to keep holdings steady Dai-ichi may sell if market conditions favourable Meiji Yasuda to cut holdings Sumitomo may sell if market conditions favourable Daido to keep holdings steady; may sell depending on market Fukoku keep holdings steady Taiyo to keep holdings steady Asahi to reduce holdings further Mitsui to trim holdings further FOREIGN SHARES, ALTERNATIVE INVESTMENTS ---------------------------------------------------------------------------------------- Nippon Life may reduce holdings in foreign shares after increase in Apr-Sept Dai-ichi to increase holdings in foreign shares, especially in emerging economies Meiji Yasuda to increase investment in emerging market shares, mostly in Asia Sumitomo to take a cautious stance on foreign stocks Daido to keep holdings steady Fukoku n/a Taiyo to keep holdings steady Asahi n/a Mitsui n/a EXPECTED MARKET RANGES ----------------------------------------------------------------------------------------- Dollar/yen Euro/yen NIKKEI JGB 10-yr US 10-yr Nippon Life Y75 - 85 Y94 - 114 8,500 - 11,000 0.9 - 1.3% n/a Dai-ichi Y75 - 85 Y95 - 115 8,000 - 10,500 0.7 - 1.1% 1.5 - 2.5% Meiji Yasuda Y75 - 83 Y95 - 110 8,000 - 10,000 0.7 - 1.0% n/a Sumitomo Y75 - 95 Y90 - 112 8,000 - 10,600 0.7 - 1.1% 1.2 - 2.5% Daido Y70 - 85 Y85 - 110 8,000 - 10,000 0.6 - 1.0% 1.1 - 2.0% Fukoku Y75 - 85 Y95 - 115 8,500 - 10,500 0.7 - 1.2% 1.5 - 2.7% Taiyo Y76 - 84 Y98 - 110 8,200 - 10,500 0.6 - 1.25% 1.4 - 2.3% Asahi Y76 - 82 Y95 - 110 8,000 - 10,000 0.7 - 1.0% 1.4 - 2.1% Mitsui Y78 - 88 Y95 - 110 8,500 - 10,500 0.7 - 1.1% 1.4 - 2.4% Link this Share this Digg this Email Reprints

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