Dai-ichi Life Insurance, certainly one of Japan’s most prominent investors and has cut holdings of shares and raised currency hedging on foreign bonds as U.S.-China trade tensions have intensified past expectations, its investment chief said.
In an unprecedented move, the insurer has already drastically modified its market state of affairs and funding plan twice this financial year starting in April, Kazuyuki Shigemoto, chief general manager for investment, mentioned to Reuters.
Japanese insurers collectively maintain 390 trillion yen ($3.7 trillion) of assets, and their funding streams have a significant impact on the bond markets and yen all over the world.
In May to boost duties on $200 billion of Chinese imports and in August to strike new 10% duties on $300 billion of Chinese goods and items, had been the triggers for the changes as U.S. President Donald Trump’s tariff bulletins.
Shigemoto stated it might likely keep its portfolio defensive.
In the past, such a significant change happened on November 2016, after Trump’s surprising victory within the U.S. presidential elections, and on August 2015, when China’s yuan devaluation jolted global markets, the investment head said.
Dai-ichi Life doesn’t plan to buy U.S. excessive-yield debt, regardless of its popularity among many bond buyers globally as yields on authorities’ bonds in European and Japan region have fallen into deep negative territory, given its cautious view on the economy and market.
But it seems to extend alternative belongings, such as actual estate investments because they retain decent returns.
Dai-ichi Life Insurance is Japan’s second-largest private life insurer, with 36.6 trillion yen in assets under management as of End-June.