Japan's Meiji Yasuda Life plans bond buying spree

Reuters

* 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 LifeInsurance may buy around 700 billion yen ($7.2 billion) indomestic bonds between now and March -- but only if the yieldsare right.

"At the current yield levels, we need to be cautious... Wefeel the bond yields have fallen a bit too far," ToshihikoYamashita, chief executive of the insurer's investment division,told a news conference.

"We plan to increase yen bond holdings, but we won't bebuying blindly," Yamashita said, adding that the company hasalready tweaked its investment plan three times in the currentfinancial year from April.

The 10-year Japanese Government Bond yield fell below 0.6percent for the first time since May on Thursday.

Meiji Yasuda, Japan's third-largest private life insurerwith total assets of about 32 trillion yen, reduced its domesticbond holdings in the April-September period when the Bank ofJapan began its dramatic "Abenomics" monetary stimulus --roiling the bond market.

At the moment, the insurer plans a 700 billion yen increasein its yen bond portfolio by March, after it reduced holdings by200 billion yen in the first half of the financial year,Yamashita said.

The investor also plans to buy foreign bonds in the secondhalf, though the amount invested is likely to be smaller than inApril-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 hedgedagainst currency fluctuations.

Yamashita also said Meiji Yasuda does not have a plan tosell dollar bonds despite its heavy exposure to U.S. Treasuriesand dollar mortgage bonds even after the political paralysis inWashington that led to a 16-day government shutdown.

U.S. dollar bonds made up 84 percent of Meiji Yasuda'sforeign bond portfolio as of March.

"Basically they have been through the same problem for along time. At the moment, I don't have a concern that they willmake a big mistake handling them," Yamashita said.

Meiji Yasuda also said it may reduce its domestic stockholdings in the six months to March, although in theApril-September period, it increased its domestic stocks by 10billion yen.

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