Like most Japanese institutional investors, Nippon Life Insurance Company is a newcomer when it comes to securitization. The company began buying domestic asset-backed issues just three years ago, when Japan's first securitization came to market, said Issei Sasaki, chief manager of the fixed income investment group in the treasury and capital markets department in Tokyo.

But with this year's explosion of domestic ABS issues, Nippon Life's asset-backed portfolio is set to grow rapidly. "Corporate bond spreads in Japan have been very tight, which makes ABS look relatively cheap. Our current ABS portfolio is very small and we have not established a future target, but the number of investments will increase," Sasaki predicted.

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