Miyako Suda, who opposed the Bank of Japan¡¯s ultraloose monetary policy as a member of its Policy Board, has a warning for the nation¡¯s life insurers as bond yields sink ever lower.
This prolonged period of ultralow rates will pressure profits as sovereign debt matures and has to be replaced with lower-yielding bonds, said Suda, who is now an external board member at Meiji Yasuda Life Insurance Co.
¡°As the duration of their JGB holdings shortens, insurers¡¯ profitability will worsen if yields stay below zero,¡± the 71-year-old said in an interview in Tokyo. ¡°If they don¡¯t change direction now, they will become poorer and poorer. The negative impact will become evident.¡±
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