Sumitomo Life to remain cautious on JGB yields, keep investment pace unchanged from H1

Sumitomo Life Insurance said on Monday it would carefully monitor yields on Japan's super-long government bonds, while it would keep its investment pace for Japanese government bonds (JGBs) unchanged in the second half of this year from the first half.

Here are some details

"For life insurers, a rise in super-long Japanese government bonds leads to improved returns on new investments and expands investment opportunities, but we will continue to monitor the movements of yields carefully, as a rapid move in yields or loss of market confidence in fiscal management could fuel market volatility," said Tadakazu Izumi, the firm's general manager in the investment planning department

Sumitomo Life expects its JGB holdings in its Asset Liability Management portfolio will decrease in the second half of this fiscal year, mirroring results from the first half


Sumitomo Life expects the Bank of Japan to raise its policy rate to 1.5% in December and hike it again to 1.75% in April

Sumitomo Life expects the 10-year JGB yield to be at 3.1% at the end of March, with the 30-year JGB yield at 4.2%