MNI BRIEF: Japan Dai-ichi Life To Increase Yen Bond Holdings

Japan’s Dai-ichi Life Insurance will expand yen bond holdings this fiscal year, building on the previous year, Kouhei Horikawa, general manager of the investment planning department at Dai-ichi Life, told reporters on Monday.

The company also stands ready to buy and sell hedged and unhedged foreign bonds in a flexible manner, depending on developments of foreign exchange and interest rates, Horikawa added, see: MNI: Japan's Dai-ichi Lifts Yen Bond View, Flexible On Offshore. Japan's second largest life insurer by assets, Dai-Ichi expects the 10-year JGB yield to move in a range of -0.10% to 0.40% during the fiscal year to March 2023.

“Hedge-costs are rising in the U.S., but we don’t plan to sell all hedged foreign bonds and shift to yen bonds,” Horikawa said, adding that judgment comes from super long-term JGB yield at around 1%. “JGB yields are still far from our attractive levels. But if we sold some of hedged foreign bonds, we will invest money in yen bonds."

The company reduced the balance of hedged and unhedged foreign bond holdings last fiscal year and increased alternative investments and will do so again this fiscal year. The company expects the dollar to move in a range of JPY110 to JPY135 and the euro to move between JPY120 and JPY140 this fiscal year.