INTERVIEW-Asia's top mutual fund hasn't sold U.S. debt as default caution grows
TOKYO, Oct 10 (Reuters) - Japan's Kokusai Asset Management, the manager of Asia's biggest mutual fund, has not sold U.S. Treasuries from its flagship $14 billion bond fund as the United States is not expected to default on its sovereign debt, the fund's chief manager said.
Masataka Horii, the chief fund manager of Kokusai's Global Sovereign Open fund, said financial turmoil was not likely to occur even in the event of a technical default by the country.
"Our main scenario is that we'll not see a default in the United States. We have not positioned our portfolio, preparing to factor-in a possible default," Horii told Reuters in an interview.
Still, Kokusai will closely watch the market situation and act appropriately if the U.S. dollar falls sharply in the unlikely event of a default, Horii said.
The actively managed bond fund, which invests in sovereign and agency debt with credit ratings of higher than a single A category, has reigned as the top mutual fund in Japan for more than 11 years. The fund is also one of the largest bond funds in the world.
The U.S. government has been partially shut down since Oct. 1 as Democrats and Republicans failed to agree on a budget and spending measures. The world's largest economy is also facing a looming deadline of Oct. 17 to raise the debt ceiling to starve off a possible debt default.
($1 = 97.1950 Japanese yen)
(Reporting by Hideyuki Sano, Takaya Yamaguchi and Chikafumi Hodo; Editing by Jacqueline Wong)