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Japan’s largest private insurer says to reduce investment into foreign bonds without currency hedge

Nippon Life announces to cut FX exposure and shift back to domestic debt

The insurer just announced plans to increase its holding of yen fixed income products – JGBs and corporate bonds – while reducing investments into foreign bonds without currency hedge in the six months from October to March next year.

Adding that they already sold some of such bonds in the past six months, mainly in the euro after the currency rose following the announcement of the EU recovery fund.

But the firm says it plans to keep its currency-hedged foreign bond holdings more steady. Elsewhere, the firm says it plans to increase foreign stock holdings – for diversification – and will likely trim its domestic stock holdings as such.

For some context, Nippon Life’s has total assets of ~$679 billion as of the end of June.

There doesn’t seem to be a mention of where they see USD/JPY trading but as they reduce Treasury holdings without a hedge, it’s not particularly relevant since currency-hedged investments are arguably more popular among Japanese investors.

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