Japan's Meiji Yasuda looks to diversify its foreign bond holdings
* Insurer to diversify currency base of foreign bonds
* Insurer to focus on credit instruments such as corporate
* Dollar bonds to remain mainstay, but insurer also eyes
(Adds details and quotes)
By Shinichi Saoshiro and Kentaro Sugiyama
TOKYO, April 23 (Reuters) - Japan's Meiji Yasuda Life
Insurance Co plans to increase its foreign bond holdings in the
fiscal year through March 2020 by diversifying into more
currencies, a senior company executive said on Tuesday.
The country's third-largest private life insurer manages
assets of around 38.5 trillion yen ($349 billion), of which
about 7.1 trillion, or 19 percent, consists of foreign bonds.
The insurer added credit assets, such as corporate bonds,
denominated in the Swedish kroner and the Canadian dollar in the
previous fiscal year, Masao Aratani, deputy president of Meiji
Yasuda Life and chief of the company's investment division, said
at a press conference.
Due to ultra-low yields at home, Japanese insurers have
struck out abroad in recent years in search of higher returns.
U.S. Treasuries were their mainstay instruments, but factors
such as high dollar hedging costs have increasingly pushed
insurers towards instruments including corporate debt and
"Dollar-denominated instruments will remain our core assets.
But we will also explore currency-hedged euro bonds if they
offer an attractive alternative to yen bonds," Aratani said.
"When it comes to currency-hedged foreign bonds, yields in
Germany are too low, and in such a case France comes into view,"
Meiji Yasuda said the ratio of its unhedged and hedged
foreign bond holdings was approximately four to six.
The insurer aims to boost unhedged foreign bond holdings
during times of yen appreciation.
After reducing them last year, Meiji Yasuda said it aimed to
slightly increase Japanese bond holdings this fiscal year with
focus on credit instruments that offer higher yields relative to
($1 = 111.7800 yen)
(Reporting by Shinichi Saoshiro; Editing by Chris Gallagher and
First Published: 2019-04-23 09:14:08
Updated 2019-04-23 10:20:38
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