Meiji Yasuda Life Doubles JGB Holdings to Over ¥2 Trillion
Taylor Wilson
Meiji Yasuda Life has doubled its fiscal-year JGB buying plan from ¥1 trillion to over ¥2 trillion, betting that the ~4% yield on 30-year bonds is a rare window to lock in long-term spread.
Why double the plan now?
The 30-year JGB yield hit a record 4.2% in May and still sits around 4%.
Meiji Yasuda's liability cost — the guaranteed return promised to policyholders — averages just under 2%.
This means → buying at 4% locks in a spread of over 2 percentage points, a margin Japanese life insurers have rarely seen in recent years.
Where does the money come from?
The company plans to sell low-yield JGBs bought in earlier years to free up capital.
Rising rates have pushed those older bonds into unrealised losses, but Meiji Yasuda will sell equities sitting on large unrealised gains to offset the hit.
In plain terms = sell the losing bonds, sell the winning stocks, and redirect the proceeds into higher-yielding new debt.
What makes them confident rates won't keep climbing?
Asset-management head Yoshimasa Osaki sees limited room for rates to rise much further, citing PM Sanae Takaichi's framing of "responsible and proactive fiscal policy."
Meanwhile, inflation fears driven by high oil prices are fading, providing macro cover for the move.
This reflects the firm's core call: rates are near a ceiling, making this the best moment to lock in yield — not the start of another leg higher.
Why restart private credit now?
Meiji Yasuda had paused private-credit investing after a retail redemption wave triggered by overseas loan-quality concerns, compounded by AI disrupting software-company business models and doubts about key borrowers' ability to service debt.
After an internal review, Osaki concluded the risks "will not evolve into a systemic problem."
This means → the firm views AI's impact on the software sector as localised and manageable, not a systemic threat to the broader credit market.
Are other insurers following?
A Nikkei survey in April found only 5 of 10 major life insurers plan to increase JGB holdings this fiscal year; most remain on the sidelines.
Daido Life's investment-planning head noted the BOJ still has room to raise rates further and flagged upcoming government fiscal-reform guidelines and Middle East risks.
Foreign investors currently account for roughly 40% of super-long JGB trading volume; their macro-driven, fast-moving style is a major source of market volatility.
In plain terms = Meiji Yasuda is a first mover, not a follower. If more life insurers join in, the added domestic demand could help stabilise the JGB market and reduce the sharp swings driven by foreign flows.
Content is for reference only, not financial advice.