Nippon Life open to becoming net JGB buyer next fiscal year
The insurer, which has held off on adding to its Japanese government bond holdings over the past two years after unrealized losses in its portfolio, is adjusting its stance.
Nippon Life Insurance, Japan's largest life insurer, is considering becoming a net buyer of government bonds next fiscal year as attractive interest rates have caught the insurer's attention. The firm has avoided adding to its Japanese government bond holdings for the past two years due to unrealized losses in its portfolio. Nippon Life's Executive Officer, Daisuke Ishida, stated that the company's investment policies are subject to change if the probability of rising interest rates decreases.
Ishida suggested that increasing the company's bond holdings in the near future is possible. He emphasized that the firm still holds a significant amount of low-yield bonds and aims to capitalize on current high yields by replacing them. Ishida expects the Bank of Japan to raise interest rates once or twice this fiscal year, with further hikes anticipated in the next fiscal year, and foresees a terminal rate in the upper 1%.
He acknowledged that some investors are delaying purchases due to inflation concerns, but believes a phase will emerge when investors can buy without excessive worry if inflation stabilizes. Ishida indicated that an escalation in the Middle East conflict could lead to an increase in bond replacement.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
