Japan's Asahi Mutual Life Insurance Co plans to invest 150 billion yen ($1.32 billion) in foreign currency bonds this fiscal year, up 50 percent from its initial plans, a senior company executive said on Monday. The insurer said in April it would spend 100 billion yen in foreign currency bonds this fiscal year. It has already spent the amount in this category in the six months ended September, Masaru Tsuruoka, head of the asset allocation and planning department at Asahi Life, told Reuters in an interview.
"There was a risk that US yields would rise sharply this year so we would cautiously invest in US bonds," Tsuruoka said. "But we decided that US yields weren't going to rise that much, as US economic policy including tax cuts were seen stalling and US inflation data were not showing a recovery." He said 90 percent of the foreign currency bonds Asahi held in the first half were currency hedged.
"At one point, we tried to increase investment in foreign bonds without currency hedging by 5 percent on hopes the dollar-yen would stabilize. But as geopolitical concerns over North Korea grew, we ended up hedging most of our foreign currency bond holdings," Tsuruoka said.
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