June 14, 2018 / 7:40 AM / 3 months ago

Japan Post Insurance to buy emerging market bonds if US rate hikes create opportunities

TOKYO, June 14 (Reuters) - Japan Post Insurance Co, one of the largest Japanese institutional investors, plans to buy emerging market bonds if other investors dump those assets as the U.S. Federal Reserve hikes interest rates, the firm’s senior managing director said.

The firm, known in Japan as “Kampo”, started investing in emerging market bonds, both sovereign and corporate, earlier this year through outside managers, Takayuki Haruna, head of credit and alternative investment, told Reuters on Thursday.

“The amount we invested is not much at the moment. We just wanted to enter the emerging bonds market but we are now looking for opportunities to buy more,” said Haruna.

“Now that the Fed signalled a steeper path for rate hikes in 2018-20, we expect elevated volatility in emerging markets.”

Kampo holds 76.8 trillion yen ($700 billion) of assets under management. Based on its latest disclosure, the life insurer holds 7 trillion yen in foreign bonds.

$1 = 110.00 yen Reporting By Tomo Uetake; Editing by Chris Gallagher

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