Halister News

(Bloomberg) -- Fukoku Mutual Life Insurance has more than tripled the amount of funds designated for investment in U.S. Treasuries, thanks to windfall yen gains from currency hedges taken at the end of last fiscal year ended in March.

• Fukoku has about 100b yen ($946m) to invest mostly in Treasuries this fiscal year, about 70b yen more than its April est., according to Takehiko Watabe, director and executive officer, and general manager of investment planning department in Tokyo
  • Fukoku manages assets of over $60b
  • It said in April it would buy 30b yen of notes abroad that are fully-hedged
• “We received some cash in profits from our hedging positions and that needs to be invested,” Watabe said in July 19 interview in Tokyo. “Our overseas debt positions are hedged, but we can buy them unhedged at around 100 yen per dollar. Therefore, we mixed hedged and unhedged positions in June-July period.”
  • Hedging gains in the previous fiscal year means Fukoku can take some currency exposure risks, Watabe added
• Fukoku raised hedging ratio on U.S. bond holdings to 82% in fiscal 2015 from 58% a year ago, boosting such positions at rate of about 110-120 yen per dollar
• Expects yen to trade between 95 and 115 versus dollar this fiscal year, compared with April est. of 105-120
• Fukoku also purchased Australian and Canadian dollar bonds on dips, although the amount is “significantly smaller” compared with U.S. notes