MNI: Japan Nippon Life: To Buy More Yen Bonds In FY2019

--Nippon Life: To Buy More Unhedged Foreign Bonds In FY2019

--Nippon Life: Hedged Foreign Bonds To Be Flat Or Fall

--Nippon Life To Actively Buy 20-, 30-Yr JGBs If Yld 1% or Higher

     TOKYO (MNI) - Japan's Nippon Life Insurance will increase its holdings of

unhedged foreign bonds in the current fiscal year, after increasing its holdings

by Y830 billion in the year ended on March 31, the company's chief fund manager

said Monday.

     The company expects the balance of hedged foreign bond holdings to be flat

or drop in the current fiscal year after reducing the balance by Y900 billion in

FY18, Shinichi Okamoto, senior general manager of the Finance & Investment

Planning Department at Nippon Life Insurance Company, told reporters.

     As for purchases of unhedged foreign bonds, Okamoto didn't elaborate on

which currency, but he said the company will likely maintain the current

proportion of forex holdings.

     Of overall foreign bond holdings of Y14.19 trillion, about 60% were held in

U.S. dollars, nearly 30% in euros, nearly 10% in sterling and the remaining

small amount in other currencies.

     "Hedging costs are likely to stay at high levels. We plan to invest money

in corporate bonds and project financing to seek higher return, while selling

government bonds," Okamoto said.

     Okamoto also said that the company will increase the balance of domestic

bond holdings in the current fiscal year after increasing them by Y1.8 trillion

during the last fiscal year.

     But he didn't elaborate of its breakdown, saying, "We will not actively buy

JGBs as the current JGB yield levels are too low to buy bonds."

     --SUPER LONG BUYERS ON DIPS

     Okamoto, however, added that the company will actively buy super long-term

JGBs, such as 20- and 30-year bonds, if those yields rose to 1% or higher.

     Nippon Life expects new assets from insurance premiums to be about Y1.6

trillion in the current fiscal year, which is the similar to about Y1.64

trillion for the last fiscal year.

     At the end of March, the balance of hedged foreign bonds held by Nippon

Life stood at Y8.87 trillion, or 13% of its total assets, and the balance of

unhedged foreign bonds at Y5.32 trillion, or 8% of the total.

     The balance of domestic bonds held by Nippon Life totaled Y28.93 trillion,

or 44% of its total assets.

     Nippon Life has traditionally invested about 70% of its total assets in

lower-risk instruments -- mainly yen-denominated securities and hedged foreign

bonds -- and about 30% in higher-risk assets such as domestic stocks, unhedged

foreign currency assets and real estate.

     The total assets held by Nippon Life at the end of March 2019 are estimated

at Y65.94 trillion, up from Y64.30 trillion at the end of March 2018.

     Nippon Life expects the 10-year JGB yield to move between -0.2% and +0.2%

-- currently the Bank of Japan's target range -- and the U.S. 10-year Treasury

bond yield in a range of 2.2% and 3.2% at the end of March 2020.

     It forecasts the dollar will trade in a range of Y100 to Y120 and the euro

will between Y120 and Y140 at the end of March 31 2019.

     The company plans to increase its holding of both domestic and foreign

stocks in the current fiscal year after increasing a total of Y210 billion in

the last fiscal year.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MAJDS$,M$A$$$,M$J$$$,M$$FI$]