Tokyo, Oct. 27 (Jiji Press)–Major Japanese life insurers will hurry further to reshuffle their Japanese government bond portfolios, replacing low-yielding bonds with higher-yielding ones as long-term interest rates trend upward, according to their latest asset management plans. Nine of the 10 major life insurers said in their plans for the second half of fiscal 2026 that they expect long-term interest rates to reach 3 pct or higher at the end of next March. Many also projected that the Bank of Japan would raise its policy rate twice more by then. Through the adjustment to their JGB holdings, the insurers aim to improve investment returns so that they can offer insurance products with more favorable terms for policyholders. Daiichi Life Insurance Co. plans to replace more than 1 trillion yen worth of JGB holdings, mainly superlong-term bonds with maturities of 20 to 40 years, during the current business year. Meiji Yasuda Life Insurance Co. plans to buy about 2 trillion yen in JGBs through a combination of bond switching and new investments. “We want to replace a substantial portion of our investment assets at current interest rate levels through the next fiscal year,” said Kenichiro Kitamura, head of Meiji Yasuda’s investment planning department. Rising long-term yields can increase latent losses on existing JGB holdings. Nippon Life Insurance Co. replaced 1.1 trillion yen worth of bonds in April-September, exceeding its initial plan. It expects to switch out a similar amount in the second half that began in October. Life insurers are increasingly turning to safe-haven assets amid inflationary pressures and uncertainty over the Middle East turmoil. Daiichi Life added gold to its portfolio this fiscal year and plans to increase its holdings of gold to about 1 pct of its total assets roughly over the next three years. Fukoku Mutual Life Insurance Co. will maintain its cash and deposit holdings at the levels accumulated by the end of March to prepare for the possibility of increased market liquidity. END [Copyright The Jiji Press, Ltd.]
