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Japan insurers shun U.S. government debt over currency hedge costs

Cuts to Treasury holdings set to continue, putting upward pressure on yields

Life insurers in Japan, the top foreign holder of U.S. government debt, have slashed their holdings of foreign bonds in recent months.   © Reuters

TOKYO -- Japanese life insurance companies plan deeper cuts to holdings of U.S. government bonds as the cost of protecting against the risk of a weak yen outpaces gains from higher interest rates.

In investment plans released by Tuesday, seven out of 10 major insurers said they would cut holdings of foreign debt, mainly U.S. Treasury bonds, in the second half of the fiscal year ending March.

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