Friday, April 27, 2018

Japanese insurers’ set foreign bond record

Japanese insurers’ bought a record ¥7.76 trillion (US$70.5 billion) of foreign bonds in the last financial year ended in March as part of their strategy to seek higher returns away from Japanese government bonds that have been yielding negative results, according to a Reuters report.

Dai-ichi Life Insurance, the third-largest life insurer in Japan by revenue, said currency-hedged foreign bonds appear more attractive compared to Japanese government bonds.

Kazuyuki Shigemoto, general manager of investment planning at Dai-ichi Life Insurance, however, said the insurer still has to look to the yield levels of FX-hedged foreign bonds closely to make investment decisions.

The insurer also keeps a cautious stance about buying European bonds prospects of the European Central Bank’s tapering its bond purchases and the uncertainties posed by elections in France, Germany, UK, and Italy.

Shigemoto though said European bonds’ yields are attractive.

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