Japan Post Insurance expects the relative attractiveness of superlong Japanese government bonds (JGBs) is growing while it also considers buying Japanese stocks if the Nikkei falls below 20,000, the insurer said on today.
Following is a summary of Japan Post Insurance’s portfolio investment plans in the half year through March. The firm, popularly known as Kampo, had total assets of 70.8 trillion yen ($676 billion) as of end-June.
Kampo expects its yen bond holdings to likely fall in Oct-March, due mainly to redemptions. But the insurer has grown positive on domestic bonds. “We think relative attractiveness of superlong JGBs is growing. We will buy more when the 20-year yield tops 0.5%,” said a senior investment official.
The insurer expects the holdings of foreign bonds, both with and without currency hedge, are likely to remain steady in the current fiscal half. Within the FX-hedged space, Kampo plans to buy U.S. investment grade corporate bonds.
Japan Post Insurance sees its domestic stock holdings staying flat or modestly increasing in Oct-March. The company plans to buy shares when the market corrects. “We will buy domestic stocks when the Nikkei dips below the 20,000 mark,” a senior official said.
Kampo plans to add alternative assets in Oct-March. The firm finds investment opportunities in private equity, domestic real estate and infrastructure.
Japan Post Insurance will start engagement activities with debt issuers in the current fiscal half, in addition to equity issuers, in an effort to step up the firm’s responsible investment.