Where Will Japan's $2.9 Trillion Insurers Put Their Money? Five Takeaways for Global Markets
- Fukoku Mutual Life to cut hedged foreign bond holdings to zero
- Nippon Life to add local debt buying when BOJ tweaks YCC
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Japan’s biggest life insurers are sticking with plans to reduce holdings of currency-hedged foreign debt this year and buying bonds at home amid speculation of central bank policy tweaks.
With combined assets of $2.9 trillion including sizable holdings of securities from US government debt to corporate bonds, their allocation plans are closely watched by investors already worried about the impact of a Bank of Japan policy change on global markets. The insurers expect hedging costs will remain expensive in the current fiscal year from April, a key factor spurring them to cut overseas holdings further, and see BOJ changes coming as early as June.