Until now, Sumitomo Marine & Fire Insurance Co. has not been a frantic buyer of domestic asset backed issues. The firm, which is the fourth largest property and casualty insurer in Japan, is far more active in guaranteeing asset-backed issues than investing in them, said Kazuo Wakayama, manager in the firm's investment planning department in Tokyo.

Japan's low interest rate environment, on top of thin spreads and low liquidity in the current domestic ABS market, mean that such issues not very attractive to Sumitomo Marine, said Wakayama. "We are not aggressively looking for ABS, mainly because it is very hard to find ABS with sufficient spreads that can mitigate the risk of low liquidity," he said.

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