UPDATE 1-Japan's Dai-ichi Life: will keep unhedged foreign bond holdings steady

Thu Apr 25, 2013 4:42am EDT

TOKYO, April 25 (Reuters) - Japan's Dai-ichi Life Insurance Co said on Thursday that it plans to keep its holdings of unhedged foreign bonds steady in the financial year that started on April 1 after increasing them last year, but that it will be flexible about changing its investment in such assets.

* Japan's second-biggest life insurer, with total assets of about 31 trillion yen ($312 billion), expects the yen to weaken further this financial year due to Japan's trade deficit and the impact of the Bank of Japan's aggressive easing.

* Dai-ichi Life said it expected the dollar to trade between 95 and 115 yen and the euro in a 120-145 yen range. On Thursday, the dollar stood at 99.12 yen while the euro fetched 129.17 yen.

* Yen bonds will remain the core part of its portfolio, Takashi Iida, manager of Dai-ichi Life's investment planning department, also said in a news conference.

* The life insurer's stance on yen bond investment this year will depend on bond yield levels, which have remained low due the Bank of Japan's easing.

* In the financial year that ended in March, Dai-ichi shifted funds to long-end yen bonds from currency-hedged foreign bonds, so it is not planning a further extension of the duration of its yen bond holdings this year. "We'd been extending the duration until last year, so we don't need to try hard to extend it this year," Iida said.

* The insurer may buy yen bonds if yields rise to levels that it would consider attractive, Iida added.

* Dai-ichi Life plans to trim its Japanese stock holdings and increase foreign stocks.

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