TABLE-Japanese insurers’ investment plans in 2014/15

A financial advisory practice of Ameriprise Financial Services, Inc.

(Reuters) – Japanese life insurers, which have combined assets of more than 180 trillion yen ($1.84 trillion) under management, are planning to shift some of their funds from domestic bonds to foreign bonds, as the Bank of Japan’s massive easing has suppressed domestic bond yields.

Below is a summary of the investment plans of Japan’s biggest life insurance companies for financial year to March 2015, as obtained by Reuters in interviews and at news conferences this month.


Nippon Life to keep hedged bonds steady or trim them, to buy unhedged bonds if yen rises Dai-ichi to allocate more funds than past, both those with and without FX hedging Meiji Yasuda to increase holdings Sumitomo to increase holdings by less than Y500 bln, reduce hedging Mitsui plans to increase holdings by Y50 bln, including FX-hedged/unhedged bonds Taiyo to maintain current holdings, might reduce hedge ratio Daido to increase holdings after buying Y100 billion last FY Fukoku to increase Y30 bln after having bought Y20 bln more than planned Asahi to increase holdings, may reduce hedging on dollar bonds slightly.


Nippon Life to increase holdings but closely eyeing yield levels Dai-ichi will not buy at current yield levels, may reduce holdings Meiji Yasuda to increase holdings but be prepared for potential yield spike Sumitomo to increase holding, but reduce buying in super-long JGBs Mitsui to increase holdings by around Y100 billion Taiyo to maintain holdings after selling Y80 billion last FY Daido to maintain holdings after selling Y110 billion last FY Fukoku to mildly increase to Y10 bln Asahi to maintain holdings flat after increasing Y90 bln last .


Nippon Life to keep holdings steady Dai-ichi to look for chances to buy on dips Meiji Yasuda to cut holdings Sumitomo to keep holdings steady Mitsui has almost finished long-term objective of reducing Japanese stocks Taiyo no plans to increase after selling Y10 billion last FY Daido to maintain holdings after buying Y5 billion last FY Fukoku increase Y10 bln, increase is 1st time in 6 years Asahi to maintain holdings steady.


Nippon Life to keep foreing share holdings steady, see opportunity in loans Dai-ichi to increase holdings in foreign shares, invest in growth areas Meiji Yasuda to increase investment in shares, keep alternatives steady Sumitomo to invest up to around Y50 bln in growth areas in infrastructure, Asia Mitsui n/a Taiyo n/a Daido to maintain holdings Fukoku n/a Asahi to slightly increase alternative investments.


Dollar/yen Euro/yen NIKKEI JGB 10-yr US 10-yr Nippon Life Y105 – 115 Y133 – 147 15,500 – 19,000 0.6 – 1.2% n/a Dai-ichi Y98 – 113 Y130 – 155 13,500 – 18,500 0.55- 1.20% 2.5 – 3.75% Meiji Yasuda Y98 – 110 Y130 – 150 13,000 – 18,500 0.5 – 1.1% 2.4 – 3.4% Sumitomo Y95 – 120 Y130 – 150 13,300 – 18,600 0.4 – 1.0% 2.4 – 3.7% Mitsui Y102 – 112 Y141 – 153 15,500 – 18,500 0.4 – 1.0% 2.5 – 3.9% Taiyo Y95 – 110 Y130 – 150 13,000 – 17,000 0.5 – 1.2% 2.5 – 3.5% Daido Y95 – 120 Y125 – 160 13,000 – 18,000 0.5 – 1.0% 2.3 – 3.8% Fukoku Y95 – 110 Y135 – 155 13,000 – 17,500 0.55 – 1.0% 2.3 – 3.5% Asahi Y97 – 115 Y132 – 154 12,500 – 17,500 0.5 – 0.9% 2.4 – 3.7% (Reporting by Tokyo Markets Team; Editing by Anand Basu).


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