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Japan's Daido Life to raise foreign bond holdings, eyes euro debt


By Daniel Leussink and Yoshiko Mori

TOKYO (Reuters) - Japan's Daido Life Insurance plans to increase foreign bond holdings in the current financial year through March next year, a senior executive said on Wednesday.

Within foreign bonds, Daido mainly looks to step up holdings of European bonds outside of Germany and France, Kenya Takahashi, general manager of the firm's investment planning department, told Reuters.

"We think the downside risks to foreign sovereign bond markets have dwindled compared to last year," said Takahashi.

"As we ended up selling (foreign government bonds) last year, we're looking to buy at times when we can secure yield under the right market circumstances," he said.

Daido increased the holdings of foreign debt by net 20 billion yen ($179 million), raising those of corporate bonds by 190 billion yen while decreasing those of government bonds by 170 billion yen.

The company also looks to buy U.S. Treasuries with no currency hedge, and will aim to buy when the dollar/yen exchange rate is at the most favorable level.

Daido said it expects the dollar to move between 100 and 115 yen this financial year.

"Considering the hedging costs, it remains hard to buy U.S. Treasuries unless it's without a currency hedge," Takahashi said.

The firm's currency hedge ratio has been around 75 percent of 1.9 trillion yen of total foreign asset holdings, which is relatively high compared to its peers, he said.

The insurer, a unit of T&D Holdings Inc with about 6.68 trillion yen ($59.7 billion) in assets, also plans to raise holdings of mainly currency-hedged investment-grade corporate bonds.

($1 = 111.8200 yen)

(Editing by Simon Cameron-Moore)

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