Japanese life insurers eye slower foreign bond purchases - Nikkei

As per the report in the Nikkei Asian Review, Japanese life insurers are purchasing foreign bonds at a much slower pace and shifting more of their investment focus to real estate and infrastructure. 

The main reason for the slow purchases is the expectation that the Federal Reserve will raise interest rates two more times this year. 

The Nikkei says, “Japan's 10 major life insurers are expected to increase their holdings of foreign bonds by 2.9 trillion yen to 3 trillion yen ($25.9 billion to $26.8 billion) on a net basis. That would be down roughly 70% from growth of 8.8 trillion yen in fiscal 2016.”

Life insurers usually invest for long-term; however, rising yields could mean high paper losses.