Sumitomo Life to hold JGB buying steady while watching yield shifts

Sumitomo Life Insurance announced it will not alter its buying rhythm for Japanese government bonds in the upcoming six months, keeping the pace set in the first half of the fiscal year. The firm will watch super-long-term JGB yields closely, noting that a swift rise or loss of confidence in fiscal policy could increase market turbulence, according to Tadakazu Izumi, head of investment planning. It expects a reduction in its JGB holdings within its Asset Liability Management portfolio during the second half, following the pattern of the first half.

The insurer projects the Bank of Japan will lift its policy rate to 1.5% in December and again to 1.75% in April. Additionally, Sumitomo Life forecasts the 10-year JGB yield to reach 3.1% by the end of March and the 30-year yield to hit 4.2%.