Latest news with #unrealizedlosses
Bloomberg
28-05-2025
- Business
- Bloomberg
BOJ's Bond Holding Paper Losses Hit Record After Rate Hikes
The Bank of Japan amassed the largest amount of unrealized losses on record from its government bond holdings in the year ended March, highlighting the challenges it faces in unwinding more than a decade of extraordinary monetary easing. The paper losses from government bonds tripled from the previous year to ¥28.6 trillion ($198 billion) at the end of the fiscal year 2024, according to the central bank's financial statement released Wednesday.
Yahoo
26-05-2025
- Business
- Yahoo
Meiji Yasuda's Paper Bond Losses Jump Eightfold as Rates Climb
(Bloomberg) -- Four of Japan's biggest life insurers reported about $60 billion of combined unrealized losses on their domestic bond holdings for the latest fiscal year, underscoring the risks they face as interest rates climb. For now, they aren't overly concerned. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Meiji Yasuda Life Insurance Co. said on Monday that paper losses on its domestic bond holdings increased more than eightfold to about ¥1.386 trillion ($9.7 billion) at the end of March compared with ¥161.4 billion a year earlier. Sumitomo Life Insurance Co. said unrealized bond losses more than tripled to ¥1.518 trillion. Combined with equivalent figures announced earlier from Dai-ichi Life Holdings Inc. and Nippon Life Insurance Co., the biggest firm in the Japanese sector, the paper losses come to about ¥8.5 trillion. That's around four times the total a year earlier. Meiji Yasuda's unrealized bond losses are neutral to its credit quality, according to Toshihiro Matsuo, a director at S&P Global Ratings. 'It holds ample unrealized gains on listed equity, which will be able to absorb realizing bond losses if necessary,' he said. Unrealized bond losses don't necessarily lead to actual selloffs because insurers tend to hold notes until they mature. Under a new rule, higher interest rates push down the value of both assets and liabilities and don't affect a regulatory gauge of fiscal soundness. Life insurers tend to be big investors in super-long debt because they need assets to match their liabilities from insurance policies spanning decades. An especially steep selloff in Japan's longest bonds pummeled the companies, as investors grew concerned about falling demand for the debt at a time when the central bank is scaling back huge bond purchases. Across Asia, life insurers are facing billions of dollars in paper losses from the market rout sparked by reactions to Donald Trump's policies. But Japanese insurers also face risks from a central bank that's looking for opportunities to raise interest rates further. Negative factors like those fueled a tumble in 30-year and 40-year Japanese government bonds that last week saw yields rise to the highest since they were first sold, though they've pulled back on Monday. There's still 'some distance' until unrealized losses increase so much that writedowns on the value of bonds are needed, Kenichiro Kitamura, operating officer and general manager at Meiji Yasuda's investment planning and research department, said at a news conference. He doesn't expect the surge in super-long Japanese yields to continue. Sumitomo Life's managing executive officer Nobuji Takao also said the chance of super-long bond yields rising further isn't high considering how much they've gone up already. While the firm's unrealized bond losses have increased, it buys bonds on the assumption they will be held to maturity, so 'we're not that concerned about it,' he said in a news conference. Last week, Nippon Life's executive officer Akira Tsuzuki said: 'Just because unrealized losses are growing, that doesn't mean something terrible will happen all of a sudden.' Still, if bonds resume falling, insurers may need to unload some of their holdings even if the declines haven't reached levels where writedowns need to be considered. The insurers may need to sell bonds, for example, if rising interest rates prompt investors to cancel insurance policies to put their cash in assets with better returns. And the companies might also sell lower-yielding debt to park their funds in bonds with higher coupons. --With assistance from Joyce Koh. (Updates with analyst's comments in fourth paragraph.) Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P.
Yahoo
26-05-2025
- Business
- Yahoo
Meiji Yasuda's Paper Bond Losses Jump Eightfold as Rates Climb
(Bloomberg) -- Four of Japan's biggest life insurers reported about $60 billion of combined unrealized losses on their domestic bond holdings for the latest fiscal year, underscoring the risks they face as interest rates climb. For now, they aren't overly concerned. NY Private School Pleads for Donors to Stay Open After Declaring Bankruptcy UAE's AI University Aims to Become Stanford of the Gulf NYC's War on Trash Gets a Glam Squad Pacific Coast Highway to Reopen Near Malibu After January Fires Meiji Yasuda Life Insurance Co. said on Monday that paper losses on its domestic bond holdings increased more than eightfold to about ¥1.386 trillion ($9.7 billion) at the end of March compared with ¥161.4 billion a year earlier. Sumitomo Life Insurance Co. said unrealized bond losses more than tripled to ¥1.518 trillion. Combined with equivalent figures announced earlier from Dai-ichi Life Holdings Inc. and Nippon Life Insurance Co., the biggest firm in the Japanese sector, the paper losses come to about ¥8.5 trillion. That's around four times the total a year earlier. Meiji Yasuda's unrealized bond losses are neutral to its credit quality, according to Toshihiro Matsuo, a director at S&P Global Ratings. 'It holds ample unrealized gains on listed equity, which will be able to absorb realizing bond losses if necessary,' he said. Unrealized bond losses don't necessarily lead to actual selloffs because insurers tend to hold notes until they mature. Under a new rule, higher interest rates push down the value of both assets and liabilities and don't affect a regulatory gauge of fiscal soundness. Life insurers tend to be big investors in super-long debt because they need assets to match their liabilities from insurance policies spanning decades. An especially steep selloff in Japan's longest bonds pummeled the companies, as investors grew concerned about falling demand for the debt at a time when the central bank is scaling back huge bond purchases. Across Asia, life insurers are facing billions of dollars in paper losses from the market rout sparked by reactions to Donald Trump's policies. But Japanese insurers also face risks from a central bank that's looking for opportunities to raise interest rates further. Negative factors like those fueled a tumble in 30-year and 40-year Japanese government bonds that last week saw yields rise to the highest since they were first sold, though they've pulled back on Monday. There's still 'some distance' until unrealized losses increase so much that writedowns on the value of bonds are needed, Kenichiro Kitamura, operating officer and general manager at Meiji Yasuda's investment planning and research department, said at a news conference. He doesn't expect the surge in super-long Japanese yields to continue. Sumitomo Life's managing executive officer Nobuji Takao also said the chance of super-long bond yields rising further isn't high considering how much they've gone up already. While the firm's unrealized bond losses have increased, it buys bonds on the assumption they will be held to maturity, so 'we're not that concerned about it,' he said in a news conference. Last week, Nippon Life's executive officer Akira Tsuzuki said: 'Just because unrealized losses are growing, that doesn't mean something terrible will happen all of a sudden.' Still, if bonds resume falling, insurers may need to unload some of their holdings even if the declines haven't reached levels where writedowns need to be considered. The insurers may need to sell bonds, for example, if rising interest rates prompt investors to cancel insurance policies to put their cash in assets with better returns. And the companies might also sell lower-yielding debt to park their funds in bonds with higher coupons. --With assistance from Joyce Koh. (Updates with analyst's comments in fourth paragraph.) Why Apple Still Hasn't Cracked AI How Coach Handbags Became a Gen Z Status Symbol AI Is Helping Executives Tackle the Dreaded Post-Vacation Inbox Inside the First Stargate AI Data Center Anthropic Is Trying to Win the AI Race Without Losing Its Soul ©2025 Bloomberg L.P.
Japan Times
26-05-2025
- Business
- Japan Times
Meiji Yasuda's bond paper losses jump eightfold as rates climb
Meiji Yasuda Life Insurance said unrealized losses on its domestic bond holdings increased more than eightfold in the last fiscal year, in the latest sign of how rising interest rates are weighing on the portfolios of Japanese insurers. Paper losses on Japanese bonds held by the Tokyo-based company expanded to about ¥1.386 trillion ($9.7 billion) in the year ended March, compared with ¥161.4 billion a year earlier, it said in a statement Monday. It followed a similar announcement last week by Nippon Life Insurance. Life insurers across Asia are facing billions of dollars in paper losses from the market rout sparked by reactions to U.S. President Donald Trump's policies. Long-term Japanese debt has been sold off as the central bank pares its holdings in the face of accelerating inflation. Japan's longest-tenure bonds tumbled last week as the central bank scaled back huge bond purchases and life insurers remain reluctant to buy the notes in a volatile market. Yields on 30-year and 40-year government bonds rose to their highest since they were first sold, though they've pulled back on Monday. Insurers are big investors in super-long debt because they need to match their long-term liabilities from insurance policies. The insurers may also need to sell bonds if rising interest rates prompt investors to cancel insurance policies to put their cash in assets with better returns. The companies may also unload lower-yielding debt to park their funds in bonds with higher yields.
Bloomberg
26-05-2025
- Business
- Bloomberg
Meiji Yasuda's Paper Bond Losses Jump Eightfold as Rates Climb
Meiji Yasuda Life Insurance Co. said unrealized losses on its domestic bond holdings increased more than eightfold last fiscal year, in the latest sign of how climbing interest rates are weighing on the portfolios of Japanese insurers. Paper losses on Japanese bonds held by the Tokyo-based company expanded to about ¥1.386 trillion ($9.7 billion) in the year ended March compared with ¥161.4 billion a year earlier, Meiji Yasuda said in a statement Monday. That followed a similar announcement last week by Nippon Life Insurance Co.
