Japanese Insurers Boost JGB Purchases to 3-Year High in June

Japanese insurers purchased $3.9 billion of 10+ year Japanese government bonds (JGBs) in June, the largest monthly buying in three years. This marks a sharp reversal from the $1.2 billion sold in May and represents only the second monthly net purchase in the past 11 months.

Insurers are among the largest domestic buyers of long-term JGBs, and their return to the market could provide critical support. The shift comes as Japanese authorities push to strengthen domestic demand, including a proposal to include government bonds in a tax-free investment program for individuals and encouragement for large pension funds to increase allocations to Japanese assets.

The move suggests Japan's bond market may finally be finding a sustainable source of domestic demand.