Sumitomo Life plans to boost foreign bond investment without FX hedge, sees limited yen gain risk

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TOKYO -Sumitomo Life Insurance plans to step up investment in foreign bonds without currency hedge in the six months to March as it sees limited risk of a stronger yen, a top investment planning official said on Tuesday.

Japan’s fourth-largest insurer also plans to increase holdings of domestic bonds as well as foreign stocks and bond funds, Toshio Fujimura, general manager of investment planning, told reporters.

Following is a summary of Sumitomo Life’s investment plan for the half year to March.

— Plan to increase holdings of foreign bonds without currency hedge by a few hundred billion yen. It invests in U.S. and Asian markets.

— Plan to reduce foreign bond investment with currency hedge by about 100 billion yen ($0.88 billion) while continuing to focus on credit products.

— Plan to increase foreign stocks and funds, including bond funds and alternative assets, possibly by a few hundred billion yen. In the last half year, the firm has increased holdings in those assets by 250 billion yen.

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— Expect U.S. inflationary pressure to gradually subside in 2022, allowing the Federal Reserve to hold off raising interest rates until 2023.

— Plan to increase yen bond holdings by about 100 billion yen, buying super-long Japanese government bonds.

($1 = 113.70 yen)

(Reporting by Hideyuki Sano)