Insurers in Japan expand foreign bond portfolio to enhance yield

Japanese life insurers are investing in the sovereign bonds of emerging countries such a Roland and Mexico, as ultra low interest rate in Japan and other developed markets effects yield. The top four insurers – with a combined securities portfolio worth $1 trillion – have invested the bulk of their funds in Japanese government bonds. 

Portfolio managers reported that they have started shifting the currency make up of their assess. “We are planning to start bond investments in new countries and we want to spend upto 30 per cent of $4.1 billion earmarked for foreign bonds,” Iwao Matsumoto, general manager at Sumitomo Life, said.