Japanese life insurers are signaling they will maintain or increase purchases of domestic bonds in the second half of the fiscal year, offering a potential source of support for upcoming government debt auctions. Japan Post Insurance said it intends to increase purchases of yen-denominated bonds, while Daido Life Insurance has raised its planned increase in domestic bond holdings, mainly through corporate debt. Meanwhile, Meiji Yasuda Life Insurance plans to keep its government bond holdings roughly unchanged while switching out of lower-yielding debt into higher-yielding securities.
The plans add to signs that demand from one of Japan’s most important groups of bond investors is beginning to recover. Insurers have been net buyers of superlong Japanese Government Bonds (JGBs) for the past four months, according to Japan Securities Dealers Association data, a trend strategists say could provide a firmer anchor for upcoming auctions.
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