Japan’s life insurers are expected to flag further selling of foreign bonds including 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 fiscal first half, having made hefty reductions in overseas debt holdings last year. Meantime, there are expectations for an increase in purchases of Japanese government bonds as yields rise at home along with signs that the central bank is edging toward a normalization of monetary policy.

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Japan’s Rising Yields, Yen Hedging Costs Drive Insurers to JGBs