Japan's Asahi Life plans to up foreign bond holdings to 150 bln yen

* Asahi to diversify foreign bonds to euro, Aussie dollar, NZ

* Asahi does not exclude foreign bonds without hedging

* Asahi to up investment in alternative products through Natixis

By Ayai Tomisawa and Shinji Kitamura

TOKYO, April 23 (Reuters) - Japan's Asahi Mutual Life Insurance Co plans to increase its foreign bond investment by 150 billion yen and cut its Japanese bonds investment for this fiscal year amid a low-yield domestic environment, a senior company executive said on Tuesday.

"The domestic yield will probably continue to stay low this year, so we will continue diversifying our investments in foreign bonds and alternative products just like last fiscal year," Masataka Matsumoto, head of the asset allocation and planning department at Asahi Life, told Reuters in an interview. The insurer will also invest 80 billion yen ($715.12 million) in alternative products such as private equity deals and infrastructure funds through Natixis Investment Managers based in Paris. Of the 150 billion yen in foreign bonds that Asahi plans to invest this fiscal year through March 2020, it will diversify currencies and regions to euro-denominated bonds, Australian dollar-denominated bonds, New Zealand and Swedish bonds.

Its investment will include government bonds, government-affilated agency bonds and bonds issued by international organisations, Matsumoto said.

As of the end of March, its U.S. bond holdings accounted for about 50 percent of its foreign bond investment category, compared to near 80 percent a year ago.

In the last fiscal year ended March, Asahi invested 100 billion yen in foreign bonds, with 120 billion yen being hedged and 20 billion yen without being hedged.

For this fiscal year, depending on market conditions it has not excluded an option of investing in open foreign bonds, or bonds without hedging, as hedge costs are rising, said Matsumoto.

"Central banks around the world are having dovish monetary policy, so we can't expect an international yield spread to widen, therefore there is a risk of the yen to rise," Matsumoto said.

Meanwhile, for its investment in Japanese bonds, it plans to cut by 50 billion yen, after slashing its investment by 20 billion yen in this category last fiscal year. ($1 = 111.8700 yen) (Writing by Ayai Tomisawa; Editing by Rashmi Aich)

2019-04-23 09:44:24

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