High hedging costs and a low yen have led Japanese life insurers to focus on domestic government bonds, although declining yields might also prompt them to seek out alternatives.
China this month overtook Europe as the world’s second-largest MMF market after the US. What does this spell for investors of these assets?
Japanese pension funds are monitoring the yen’s extreme depreciation against the US dollar while considering next moves.
With a new regulatory regime in the making, the lifers’ relatively high allocation to domestic equity will incur a higher cost, and selling off can be either boom or bust.
As interest rates have started to move, the larger Japanese life insurers consider either unhedged US investments, or aiming for the eurozone.
Chinese derivatives are creating a wealth of untapped opportunities for both domestic and foreign institutional investors.
The UK-headquartered fund manager has made the appointment as one of four ESG specialists who will operate a sustainability centre, based in Singapore.
The country insurers' offshore asset allocations will likely remain much lower than the regulatory limit of 15% this year, despite their need to locate higher levels of return.
Insurers from the country face increasing risks in the local equity market, but they may have to take them with fixed income returns set to diminish further due to a lower interest rate.
Moody’s and Fitch Ratings say that emerging market defaults are increasingly likely to hit record highs, with Asia-Pacific corporates looking particularly vulnerable.
Japanese life insurers are well-suited to weather long-term global turbulence as the coronavirus spreads, but certain investment strategies might turn sour, say rating agencies.
Korean securities companies will continue to supply domestic asset owners with new overseas alternative investments, but they are taking increasingly higher risks in the process.