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Japan Post is slowly buying the longest bonds after the BOJ raises interest rates

Japan Post Insurance is reluctant to buy most domestic superlong bonds amid concerns that the central bank’s reduction in debt purchases could weigh on the market.

Government bond yields have risen in recent weeks on expectations that the Bank of Japan will further reduce monetary stimulus. The higher yields should be attractive to life insurers in Japan, which are big investors in super-long bonds, such as 30-year securities. But they have been slow to add to their holdings, even after the BOJ raised rates in March for the first time since 2007.

“Super long-term bond yields have risen to attractive levels,” said Hiroyuki Nomura, senior general manager of Japan Post’s investment planning department. But with the Japanese fiscal year recently starting on April 1, the insurer is keeping an eye on market developments, and only slowly. increasing buying, he said.

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