Japan’s life insurers to halve bond purchases

Written by Adam Cadle

25/04/2024

Japan’s life insurers plan to halve net purchases of Japanese government bonds in fiscal 2024, a Nikkei survey has revealed.

Nikkei asked 10 major players about their investment strategies for the year. The eight players with comparable data from fiscal 2023 said they plan to increase their combined JGB holdings this fiscal year by 600bn yen ($3.86bn). They had planned a roughly 1.2bn yen increase last fiscal year.

“Given the current rates, we’re not at a point where we need to be making active purchases,” Fukoku Mutual’s general manager of the investment planning department, Junya Morizane, said. He said the insurer will instead focus on offloading low-yield government bonds to update its portfolio.

Insurers are now turning to alternative assets as a way to boost returns. All 10 said they plan to expand holdings of such assets.

“We will acquire more floating-rate assets, such as direct lending and collateralised loan obligations, Nippon Life’s executive officer, Akira Tsuzuki, added.

Nikkei surveyed: Nippon Life Insurance, Dai-ichi Life Insurance, Meiji Yasuda Life Insurance, Sumitomo Life Insurance, Fukoku Mutual Life Insurance, Taiy Life Insurance, Daido Life Insurance, Asah Mutual Life Insurance, Taiju Life Insurance and Japan Post Insurance.

Related Articles