TOKYO (Reuters) - Japan Post Bank said on Thursday it will expand investment into long-term government bonds to take advantage of rising yields from the central bank's expected tapering of its huge bond purchases.

The investment appetite by Japan Post Bank, which has total assets of $1.5 trillion, may help keep long-term interest rates low, even as the Bank of Japan (BOJ) begins to trim bond purchases under a plan set for release next month.

"We have already begun shifting investment towards government bonds from deposits in light of shifting trend in Japan's interest rates," a public relations official at Japan Post Bank said.

"We plan to keep expanding investment mainly into long-term Japanese government bonds (JGB)," or notes with 7-10 years of maturity, taking into account the size of the BOJ's future bond buying taper and the market fallout, the official said.

The remarks came in response to a query by Reuters on how the BOJ's quantitative tightening (QT) plan, due out next month, could affect Japan Post Bank's investment strategy.

As one of the country's biggest market players, Japan Post Bank yields huge influence in the JGB market.

It has ramped up investment in JGBs with the balance of holdings totaling 5.15 trilion yen ($32.56 billion) as of March, expanding 1.5-fold from levels in December last year.

($1 = 158.1700 yen)

(Reporting by Takahiko Wada, writing by Leika Kihara; Editing by Michael Perry)

By Takahiko Wada