(Adds details on planned bond purchases)
By Shinichi Saoshiro and Takashi Umekawa
TOKYO, April 23 Japan's Meiji Yasuda Life
Insurance said on Wednesday that it plans to keep the bulk of
its investments in yen bonds but also wants to continue
increasing foreign bond holdings in the year through 2015 in
search of better returns.
Japan's third-largest private life insurer increased its
foreign bond holdings by 750 billion yen to 4.16 trillion yen,
or 12 percent of its total assets, in the year that ended in
March, a company official told a news conference.
The company has total assets of about 32 trillion yen ($312
The insurer said it will make new investments of about 800
billion yen in 2014/15, of which it a little over half will be
in yen bonds and roughly 40 percent in foreign bonds.
Of the money earmarked for foreign bonds, Meiji Yasuda Life
said it will spend about 60 percent of it on unhedged bonds and
the remainder on hedged bonds, which offer protection against
"Our unhedged foreign bond holdings have been denominated
almost entirely in U.S. and Australian dollars and the euro,"
said Toshihiko Yamashita, chief executive of the investment
division at Meiji Yasuda Life.
"But we are looking to diversify our range of currencies,
with the candidates being the sterling, the Canadian dollar, and
the Mexican peso, which is showing signs of settling down,"
Meiji Yasuda Life expects the dollar to range between 98 and
110 yen in 2014/15, settling towards 105 yen at the fiscal
year's end in March 2015. It was trading at around 102 yen on
The insurer's desire for foreign bond holdings has been
driven by low domestic yields, a result of massive quantitative
easing introduced by the Bank of Japan a year ago.
The benchmark 10-year Japanese government bond
yielded 0.610 percent on Wednesday, within reach
of a 10-month trough of 0.570 percent hit in March.
Still, Meiji Yasuda Life expects the 10-year yield to rise
towards 0.80 percent by March 2015 on the back of a recovering
The insurer was also wary of yields rising suddenly and
sharply in a bond market said to have lost much of its liquidity
due to the BOJ's massive easing, which involves purchasing a
large amount of government debt from the market.
"If yields rise, the question is whether we are actually
able to sell bonds as liquidity is low. Selling bonds when
yields rise also entails booking losses," Yamashita said.
"Our measures in such a situation would include selling
shorter-dated debt, which are less affected by an overall rise
At the end of March Meiji Yasuda Life held 16.9 trillion yen
of yen bonds, which made up 51 percent of its total assets.
($1 = 102.6000 Japanese Yen)
(Editing by Dominic Lau & Kim Coghill)