* May buy around 700 bln yen domestic bonds by March
* Reduced yen bonds by Y200 bln in Apr-Sept
* Current JGB yield too low
* May buy Y200 bln in foreign bonds
By Hideyuki Sano and Tomo Uetake
TOKYO, Oct 24 (Reuters) - Japan's Meiji Yasuda Life Insurance may buy around 700 billion yen ($7.2 billion) in domestic bonds between now and March -- but only if the yields are right.
"At the current yield levels, we need to be cautious... We feel the bond yields have fallen a bit too far," Toshihiko Yamashita, chief executive of the insurer's investment division, told a news conference.
"We plan to increase yen bond holdings, but we won't be buying blindly," Yamashita said, adding that the company has already tweaked its investment plan three times in the current financial year from April.
The 10-year Japanese Government Bond yield fell below 0.6 percent for the first time since May on Thursday.
Meiji Yasuda, Japan's third-largest private life insurer with total assets of about 32 trillion yen, reduced its domestic bond holdings in the April-September period when the Bank of Japan began its dramatic "Abenomics" monetary stimulus -- roiling the bond market.
At the moment, the insurer plans a 700 billion yen increase in its yen bond portfolio by March, after it reduced holdings by 200 billion yen in the first half of the financial year, Yamashita said.
The investor also plans to buy foreign bonds in the second half, though the amount invested is likely to be smaller than in April-September, when it bought a net 290 billion yen.
Of that amount, about 220 billion yen was hedged, with about 60 percent of its foreign bond investment now hedged against currency fluctuations.
Yamashita also said Meiji Yasuda does not have a plan to sell dollar bonds despite its heavy exposure to U.S. Treasuries and dollar mortgage bonds even after the political paralysis in Washington that led to a 16-day government shutdown.
U.S. dollar bonds made up 84 percent of Meiji Yasuda's foreign bond portfolio as of March.
"Basically they have been through the same problem for a long time. At the moment, I don't have a concern that they will make a big mistake handling them," Yamashita said.
Meiji Yasuda also said it may reduce its domestic stock holdings in the six months to March, although in the April-September period, it increased its domestic stocks by 10 billion yen.