Fuji Investment Management Co. is contemplating making its first systematic use of interest-rate swaps to enhance yield on its JPY1 trillion (USD8.1 billion) fixed-rate bond portfolio in the event of a rise in interest rates. Akira Takei, fund manager and senior v.p., said a tax cut in the U.S. is inevitable. This will lead to a pick up in growth and make an interest-rate hike inevitable later this year. Fuji is interested in receiving floating in a swap to enhance yield on its fixed-rate bond portfolio, he explained.
The company's fixed income and futures brokers would probably act as counterparties in a swap, Takei said. These include Morgan Stanley Dean Witter, Merrill Lynch, Credit Suisse First Boston and BNP Paribas. Officials at the firms declined comment or did not return calls.
