Loading
Search
▼ Major Japan Life Insurer To Pile Into Domestic Super-Long Bonds
- Category:Other
Fukoku Mutual Life Insurance plans to invest in Japan’s super-long government bonds this fiscal year after their yields skyrocketed, and is considering shifting from foreign debt.
"Yields have risen to levels that align with our investment perspective, so we will proceed with bond re-balancing while actively increasing holdings,” said Junya Morizane, general manager of the insurer’s Investment Planning Department. "There is ample room to continue purchasing super-long bonds.”
The debt, the main investment for Japan’s life insurers, has seen wild swings along with its U.S. counterparts as the global trade war deepens. After a steep selloff drove the 20-year sovereign yield to its highest since 2004, super-long bonds rebounded this week as Bank of Japan Gov. Kazuo Ueda suggested a policy response to higher U.S. tariffs.
Investment decisions by Japan’s life insurers are closely tracked as they can move global markets, and Fukoku will be the first among its major peers to report such plans for this fiscal year. They have combined invested assets of about ¥390 trillion ($2.7 trillion), according to the Life Insurance Association of Japan.
Fukoku aims to increase domestic government bond holdings by ¥30 billion, and gross purchases may reach ¥300-400 billion. The company is taking a proactive approach to investing even as U.S. President Donald Trump’s trade war roils global markets.
"It has been a tiring couple of weeks,” said Morizane. "We decided on this plan in March, but the underlying assumptions have changed significantly.”
"There’s been so many meetings and we are analyzing how far our revenue will fall and how much we can recover in this environment,” he said.
Expectations for further rate hikes by the BOJ had helped boost yields earlier this year, but tariffs have muddied the picture, with overnight index swaps showing a 54% chance of an increase by the end of this year.
Fukoku sees two rate hikes this fiscal year, and expects Japan’s 10-year yield to sit at 1.7% at the end of March 2026, up from 1.305% as of Thursday. Yields on 20-year bonds may end the financial year at 2.4%, according to Morizane, compared with about 2.23% recently.
"The 20-year has reached more than 2%, so it’s sufficient,” said Morizane, adding that Fukoku is already making considerable efforts to buy Japan’s super-long bonds. "It’s totally possible to switch from foreign bonds to domestic without compromising profitability, and we are considering revising our plan in May.”
Japanese investors offloaded foreign bonds at a slower pace last week amid the worst selloff in Treasuries in over two decades.
"Our strength lies in refraining from investing during the era of aggressive monetary easing,” Morizane said. "Even if other companies can’t act in this high-volatility environment, we are able to invest steadily.”
"Yields have risen to levels that align with our investment perspective, so we will proceed with bond re-balancing while actively increasing holdings,” said Junya Morizane, general manager of the insurer’s Investment Planning Department. "There is ample room to continue purchasing super-long bonds.”
The debt, the main investment for Japan’s life insurers, has seen wild swings along with its U.S. counterparts as the global trade war deepens. After a steep selloff drove the 20-year sovereign yield to its highest since 2004, super-long bonds rebounded this week as Bank of Japan Gov. Kazuo Ueda suggested a policy response to higher U.S. tariffs.
Investment decisions by Japan’s life insurers are closely tracked as they can move global markets, and Fukoku will be the first among its major peers to report such plans for this fiscal year. They have combined invested assets of about ¥390 trillion ($2.7 trillion), according to the Life Insurance Association of Japan.
Fukoku aims to increase domestic government bond holdings by ¥30 billion, and gross purchases may reach ¥300-400 billion. The company is taking a proactive approach to investing even as U.S. President Donald Trump’s trade war roils global markets.
"It has been a tiring couple of weeks,” said Morizane. "We decided on this plan in March, but the underlying assumptions have changed significantly.”
"There’s been so many meetings and we are analyzing how far our revenue will fall and how much we can recover in this environment,” he said.
Expectations for further rate hikes by the BOJ had helped boost yields earlier this year, but tariffs have muddied the picture, with overnight index swaps showing a 54% chance of an increase by the end of this year.
Fukoku sees two rate hikes this fiscal year, and expects Japan’s 10-year yield to sit at 1.7% at the end of March 2026, up from 1.305% as of Thursday. Yields on 20-year bonds may end the financial year at 2.4%, according to Morizane, compared with about 2.23% recently.
"The 20-year has reached more than 2%, so it’s sufficient,” said Morizane, adding that Fukoku is already making considerable efforts to buy Japan’s super-long bonds. "It’s totally possible to switch from foreign bonds to domestic without compromising profitability, and we are considering revising our plan in May.”
Japanese investors offloaded foreign bonds at a slower pace last week amid the worst selloff in Treasuries in over two decades.
"Our strength lies in refraining from investing during the era of aggressive monetary easing,” Morizane said. "Even if other companies can’t act in this high-volatility environment, we are able to invest steadily.”
- 19/4 18:52
- Comment (0)
- Trackback(0)