Meiji Yasuda Life Insurance Company is poised to substantially increase its investment in super-long Japanese government bonds (JGBs) during fiscal year 2026, which runs until March 2027. The insurer plans to acquire approximately \1 trillion ($6.2 billion) in these long-dated instruments. This move comes as the company seeks to capitalize on attractive yields, with 30-year JGBs hovering around 3.66%. The firm had previously curtailed its government bond investments in the first half of the current fiscal year, indicating significant capacity for new purchases.
This aggressive buying strategy contrasts with the broader trend among Japanese insurers, who collectively sold a net \201.2 billion ($1.25 billion) of JGBs due in more than 10 years in May, partially offsetting \327.2 billion ($2.03 billion) in purchases during April. Meiji Yasuda's increased commitment suggests a belief that JGB yields are nearing their peak, making current levels opportune for locking in higher returns to match long-term policy liabilities. Other major life insurers, such as Nippon Life, are also expected to increase their JGB holdings, while Japan Post Insurance plans to raise its domestic bond holdings for the first time in almost two decades.
A Reuters survey indicated a shift in sentiment among Japan's top 10 life insurers, with four planning to increase their domestic bond holdings in fiscal year 2026, a rise from the previous year. This, however, represents a more targeted approach rather than a widespread bond boom, as total domestic bond holdings across these insurers are still projected to fall. Meiji Yasuda's specific target of up to \1 trillion in super-long JGBs for fiscal year 2026 highlights its confidence in the segment, especially considering its stated upper limit for 30-year JGB yields at 4.00% and 20-year JGB yields at 3.50%.
While Meiji Yasuda and Nippon Life are also among the few insurers planning to increase foreign bond holdings, the focus for the super-long JGB increase is driven by the desire for stable, long-term income to meet policy obligations. This strategic investment is expected to contribute to stabilizing the long end of the yield curve, as more insurer demand provides support for attractive interest rates on extended-term debt. The decision to increase domestic exposure also comes amid narrowing U.S.-Japan yield gaps and rising hedging costs for overseas investments.
