Japan’s leading life insurers plan to significantly reduce their net purchases of Japanese government bonds (JGBs) in fiscal 2024, amid expectations of rising long-term yields following potential Bank of Japan (BOJ) rate hikes, according to a Nikkei survey. These insurers are shifting their focus towards alternative assets like floating-rate bonds and collateralised loan obligations to enhance returns, reflecting changes in their investment strategies due to the current low yield environment. The surveyed insurers, including Nippon Life and Dai-ichi Life, are also adjusting their portfolios by reducing holdings in low-yielding government bonds and selectively investing in higher-return assets. This strategic pivot comes as hedging costs remain high, prompting a mixed response to foreign bond investments.