日本十大寿险下半年计划置换高息债券，超长债买盘或支撑JGB但缺乏个股增量催化

Japan’s life insurers are swapping out of lower-yielding bonds into higher-yielding debt as elevated yields create opportunities to boost portfolio returns.

Investment plans from 10 major domestic insurers for the second half of the fiscal year show the strategy is widespread, improving returns even when redemptions leave their overall domestic bond holdings flat or lower. At the same time, some firms are adding domestic bonds as yields reach levels they view as attractive.

The investment plans come after super-long JGB yields climbed to multi-decade highs this year. Japanese investors’ purchases of domestic government bonds climbed to the highest in 17 years in the fiscal first half, with insurers among the net buyers alongside trust banks and banks, according to data from the Japan Securities Dealers Association.

“Comments from investment executives suggest a positive shift in their stance toward JGBs, reflecting the increased investment attractiveness following the rise in yen interest rates and the peaking of global interest rate pressures,” said Ryutaro Kimura, senior bond strategist at BNP Paribas Asset Management. Insurers may have capacity to buy after they held back purchases starting late last fiscal year into the beginning of this year amid concerns over further increases in interest rates, he said.

Nippon Life Insurance Co., Japan’s largest life insurer, expects its domestic bond holdings to decline as it continues replacing lower-yielding bonds carrying unrealized losses with higher-yielding debt. Still, current interest rates have reached “quite attractive levels” that “warrant investment,” said Daisuke Ishida, executive officer of the firm’s finance and investment planning department.

Beyond bond switching, strategies are diverging as insurers respond differently to market risks. Some are directing new money toward corporate debt, while others are shifting from currency-hedged foreign bonds into domestic debt drawn by higher Japanese yields. Daiichi Life Insurance Co. began investing in gold to diversify its portfolio, while Fukoku Mutual Life Insurance Co. plans to maintain an elevated cash position amid market uncertainty.

“Given first-half investment activity and continued net purchases of super-long bonds by life insurers in recent months, as shown in over-the-counter bond trading data, life-insurer demand is likely to continue supporting the domestic bond market in the second half,” said Naoya Hasegawa, chief bond strategist at Okasan Securities, in a note.

“Demand is likely to strengthen at around 3% for the 10-year JGB yield and 4% for the 30-year yield on a simple-yield basis,” Hasegawa said.

Japanese insurers have about ¥386 trillion ($2.4 trillion) of invested assets, according to end-July data from the Life Insurance Association of Japan, and changes in their allocation strategies can have implications for both domestic and overseas markets.

READ: Japan Life Insurers’ Bond Buying Plans Offer Support for JGBs

Life insurers have traditionally been important buyers of super-long JGBs as they seek to match their long-term liabilities, making their investment plans closely watched as the government seeks buyers for its debt while the Bank of Japan reduces its presence in the market.