Nomura say attractive levels of yields on US corporate and mortgage debt, without currency hedging for Japanese life insurance companies

  • Estimates a large part of life insurers' purchases of foreign bonds in March was for dollar-denominated securities (second-biggest amount purchased on record for the month, which is the end of Japan's fiscal year and typically sees subdued investment activities)
  • Says USD/JPY bottoming, yields stabilizing in March, Japanese life insurers might have found it easier to buy USD securities
  • And for as long as U.S. 10-year yields are expected to pivot around 3%, it's natural for life insurers to consider non-hedged investments in USD assets