Six of Nine Japan life insurers to invest in Japanese government bonds

Six of the nation’s nine major life insurance companies plan to increase their holdings of domestic bonds, mainly Japanese government bonds, in the second half of fiscal 2013, which ends next March, their asset management plans have revealed.

The six are Nippon Life Insurance Co., Meiji Yasuda Life Insurance Co., Sumitomo Life Insurance Co., Fukoku Mutual Life Insurance Co., Mitsui Life Insurance Co. and Asahi Mutual Life Insurance Co. They plan to invest mainly in 20-year and longer-term JGBs to match the lengths of their insurance contracts in force.

Their shift of focus to JGBs comes as Japanese interest rates have stabilized in recent months, although they remain at low levels.

In contrast, only four of the nine firms—Meiji Yasuda, Taiyo Life Insurance Co., Daido Life Insurance Co. and Mitsui—are set to increase their holdings of foreign bonds. Asahi plans to reduce its foreign bond holdings, while Nippon Life, Dai-ichi Life Insurance Co. and Fukoku will keep their holdings unchanged.

In the April-September first half, eight of the nine raised the balances of their foreign bond holdings.

The benchmark 10-year JGB yield fluctuated wildly after the Bank of Japan introduced a bold monetary policy, called quantitative and qualitative easing, in April that focuses on massive JGB purchases.

Source: The-Japan News