Japan’s life insurers are expected to flag further selling of foreign bonds including U.S. Treasuries when they start outlining investment plans next week for the fiscal second half through March.

Yet the extent of the sales may continue to moderate, in line with the trend seen in the first half, having made hefty reductions in overseas debt holdings last year. Meanwhile, there are expectations for an increase in purchases of Japanese government bonds (JGBs) as yields rise at home along with signs that the central bank is edging toward a normalization of monetary policy.

The investment plans of the nation’s life insurers, which have combined assets of $2.7 trillion, are closely followed because of their impact on Japanese and global markets. The European Central Bank and its U.K. counterpart are among those to have warned of the risks of increased volatility from a repatriation of Japanese funds as policymakers in Tokyo recalibrate their interest-rate settings.