MNI: Japan Sumitomo Life Plans Higher Yen, Foreign Bond Buys

--Sumitomo Life: To Buy More Longer-End JGBs If Yields Rise 

--Sumitomo Life: To Increase Hedged Foreign Bonds If Yen Rises

     TOKYO (MNI) - Japan's Sumitomo Life Insurance company will look to increase

its foreign bond holdings, mainly corporate bonds, by several hundred billion

yen, reversing last year's investment policy, the company's chief fund manager

said Friday.

     The company lowered foreign bond holdings by JPY40 billion in the 12 months

through end-March to JPY9.61 trillion, 29.9% of its total assets.

     But the firm increased its foreign stock holdings by JPY310 billion to

JPY1.34 trillion, or 4.2% of its total asset.

     --JGB BUYER

     The lifer also plans to increase the balance of domestic bond holdings

again after increasing by JPY480 billion to JPY13.8 trillion (43% of its total

assets) in fiscal 2019.

     The company plans to buy super long-term JGBs, such as 20-, 30- and 40-year

bonds, and will increase its purchases if yields move higher.

     The company expects new assets from insurance premiums to be the similar to

the JPY370 billion seen in the last fiscal year.

     As for hedged foreign bonds, Sumitomo Life is mainly focused on high-credit

corporate bonds as it seeks higher return than from government bonds.

     The company plans to increase the balance of unhedged foreign bonds but it

will consider shifting to hedged foreign bonds if concern over the yen's rise

picks up.

     --YEN RANGE

     The company expects the dollar to trade between JPY100 and JPY115 and the

euro to move in a range of JPY105 to JPY130.0 in this fiscal year.

     Sumitomo Life expects the 10-year JGB yield to move between -0.3% and

+0.20% and the U.S. Treasury 10-year yield to move in a range of 0.3% to 2.0%.

     Life insurance firms favor long-term yen assets that match their long-term

yen liabilities, although they consider investments in hedged foreign bonds as

an alternative to yen bond holdings.

     At the end of March, Sumitomo Life's assets totaled JPY32.08 trillion, up

from JPY31.92 trillion at the end of March 2019.

--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: M$A$$$,M$J$$$,M$$FI$,MN$FI$,MN$FX$]