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Monday, May 19, 2008

Mitsui Life Insurance Co. plans to buy debt with more than 10 years of maturity

Japan’s fifth largest life insurance company by assets, Tokyo based Mitsui Life Insurance Co. is planning to buy more domestic bonds and foreign debt hedged. The company is expecting a currency risk in the current fiscal year starting from April. In an interview on Friday, Yoichiro Matsuta, strategy manager, Mitsui Investment told that his company is planning to increase domestic debt with more than 10 years to maturity by 40% of its total assets. Foreign bonds will make up about 4% of investments. Bloomberg reports:

``We plan on increasing domestic government bond investment'' to 2.7 trillion yen ($26 billion), Matsuta said. ``Asian and emerging market stocks also look very attractive.''

Nippon Life Insurance Co., Japan's biggest life insurer, said last month it plans to buy 400 billion yen in Japanese debt this fiscal year. Dai-ichi Mutual Life Insurance Co., the second largest, also said last month it plans to raise holdings of long-term domestic bonds and foreign stocks.

Of the Japanese allocation, Mitsui Life will invest about 10 percent in municipal bonds, 60 percent in government debt and the rest in corporate and agency notes, according to Matsuta.

Yoichiro expects that 10-year government bonds will trade between 1.2% and 1.8% in the current fiscal year. Today, at Japan Bond Trading Co. the yield fell 3 basis points to 1.66%.

Related article:
Bloomberg

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