Barclays on plans by Japan’s largest four life insurers to reduce JGB holdings

I posted earlier on Nikkei: "Japan life insurers set to cut JGB holdings by $9bn"

Via a Barclays note now, in brief:

• Japan’s largest four life insurers plan to reduce or stay flat in JGBs
• Many life insurers view super-long bonds as attractive compared to their liability costs, but they are unlikely to buy aggressively.
• Most have already completed their asset-liability duration matching to comply with new regulations and remain cautious about the risk of rising yields.
• The pace of purchases is expected to be steady, with the largest insurers concentrating on the 30-year sector, while others are targeting both the 20- and 30-year maturities. One insurer with a longer liability profile is also considering investments in the 40-year sector.