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Japanese life insurers buying foreign bonds at slower pace

Rising US interest rates give rise to caution

Japanese life insurance providers like Dai-ichi Life, left, and Nippon Life have stepped up investments in higher-yielding foreign bonds.

TOKYO -- Alarmed by the prospect of U.S. interest rate hikes, Japanese life insurance companies are purchasing foreign bonds at a much slower pace and shifting more of their investment focus to real estate and infrastructure.

Japan's 10 major life insurers are expected to increase their holdings of foreign bonds by 2.9 trillion yen to 3 trillion yen ($25.9 billion to $26.8 billion) on a net basis, according to their fiscal 2017 asset management plans shared with The Nikkei. That would be down roughly 70% from growth of 8.8 trillion yen in fiscal 2016.

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