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Fewer Treasurys, more JGBs in the cards for Japan life insurers

Nippon Life, Dai-ichi Life executives discuss possible rate shifts and stronger yen

Akiko Osawa, a managing executive officer at Nippon Life Insurance, said investing in Treasurys has "no appeal" after accounting for currency hedging costs. (Photo by Kosuke Iguchi)

TOKYO -- Two major Japanese life insurers are planning to reduce their U.S. Treasury holdings in favor of Japanese government bonds in fiscal 2023 as they grow wary of high currency hedging costs and the risk of a stronger yen.

Dai-ichi Life Insurance plans to cut its holdings of currency-hedged Treasurys, and Nippon Life Insurance also plans a more cautious approach to unhedged foreign debt. This comes amid a broad trend in Japan's life insurance industry toward buying more JGBs, anticipating a change in policy by the BOJ.

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