Japan Post Bank hoovers up foreign assets after 2008

Japan Post Bank has increased its proportion of foreign securities to 5.66% of its ¥191.4 trillion ($2.5 trillion) portfolio, from virtually zero in March 2008, notes a Japan Pensions Industry Database blog.

In its results statement to September 30, Japan Post reports a 5% year-on-year drop in holdings of Japan Government Bonds (JGBs) to ¥141.6 trillion, compared with ¥149.3 trillion a year previously, reports www.ijapicap.com.

It is the first time in the past three-and-a-half years that Japan Post has seen its JGB holdings drop below 75% of its overall portfolio. In March 2008 it held ¥156.8 trillion of JGBs, which represented 76.4% of what was then a ¥205.1 trillion portfolio.

It means that over the past three-and-a-half years Japan Post has seen overall AUM in its portfolio decline 6.7% (although over the past year it has risen 0.5%).

But the rise in the Japanese currency has meant that while its portfolio has declined 6.7% in total yen value since March 2008, in US dollar terms it has risen just under 20%.

Quoting the eNikkei, www.ijapicap.com notes that the strength of the yen has led several politicians in Japan to call for Japan Post to expand foreign bond holdings on the understanding that consequent sales of yen would have a beneficial effect on the exchange rate.

What the financial statement also showed was that Japan Post has increased its holdings of foreign securities from ¥500 billion in March 2008 to ¥10.8 trillion as at September 30, or from 0.22% to 5.66% of its total portfolio. In the past year alone it has increased its exposure to foreign securities by ¥3.1 trillion.

By September this year Japan Post held ¥5.7 trillion in local government bonds, a slight rise on a year ago, and ¥12.7 trillion in Japanese corporate bonds, a marginal decline. It also held ¥200 billion in commercial paper.