Wednesday, October 23, 2013
Nippon Life To Target JGBs In 2nd-Half Investment
TOKYO (Nikkei)--Nippon Life Insurance Co. will pour most of its fresh investment funds into Japanese government bonds in the second half in light of the return of market stability.
Back in April, when long-term interest rates hit record lows after the Bank of Japan's decision to roll out aggressive monetary easing, the firm was planning to curb investment in Japanese bonds.
But with interest rates stabilizing, it will invest nearly all of the increase in assets for the fiscal second half -- around 600 billion yen -- in domestic bonds, mainly JGBs.
Lately, interest rates have been trending lower thanks to the BOJ's easy-money policy and a delay in the tapering of monetary easing by the U.S. Federal Reserve. The yield on key 20-year JGBs is about 1.5%, not high enough for the firm to actively increase investment in them, says Hiroshi Ozeki, head of financial planning.
The firm expects interest rates to slowly rise toward the fiscal year-end in March, so it intends to boost investment in domestic bonds accordingly. Meanwhile, it will keep holdings of foreign bonds little changed. Domestic shareholdings and lending will be kept flat or reduced.
(The Nikkei, Oct. 23 morning edition)