Meiji Yasuda Life Insurance will likely wait until yields rise on Japan’s superlong sovereign bonds before it starts buying them again.
Japanese life insurers are the main buyer of bonds due in more than 10 years and typically increase purchases toward the end of the fiscal year. Investor appetite has been sluggish amid falling yields, with that on benchmark 30-year securities declining to 1.58% on Monday from a decade-high of about 1.9% reached in November.
Speculation about an early interest rate cut by the Federal Reserve has also pressured yields. Additionally, the devastating earthquake that struck Ishikawa Prefecture on Jan. 1 has damped expectations that the Bank of Japan will end the world’s last negative-interest rate in the near future. Swap markets price in about a 5% chance of a rate increase at its meeting in March compared with about 70% a month ago.