TOKYO, April 2 Reuters Japanese life insurers are considering buying foreign bonds again after a record selling spree, as U.S. Treasuries yields have bounced back close to their comfort levels.
Executives at Japans top four insurers, which manage more than 1.6 trillion in assets, told Reuters U.S. bonds are becoming attractive at yields near 2.
A return of the longterm investors could help stabilise a market facing pressure from upbeat economic sentiment and concerns about inflation.
Sharp rises in U.S. bond yields on hopes of economic normalisation are prompting the institutional investors to look again at the market after shunning it for months. The 10year U.S. Treasury yield rose to a 14month high of 1.776 earlier this week from around 0.90 in December.
The insurers expect the 10year Treasury yield to test 2 in the coming months.
U.S. vaccination has progressed faster than expected, and the U.S. economy is recovering faster than Japan and Europe, said Kenjiro Okazaki, general manager of global fixed income investment at Daiichi Life Insurance.
Weve been thinking Treasury yields would gradually rise but its pace surprised us. We now think the 10year yield could top 2 as early as AprilJune.
Japanese life insurers have been selling foreign bonds for eight months since July, their longest netselling streak since the Ministry of Finance started compiling the data in 2005, mostly shifting to domestic bonds.
The U.S. dollar accounts for almost twothirds of the…