PANews reported on May 23 that according to Bloomberg Terminal, Nippon Life Insurance Co., Japan's largest life insurance company, saw its unrealized losses on domestic bond holdings more than triple to about 3.6 trillion yen (about 25 billion U.S. dollars) in the fiscal year ending in March this year, mainly because Japanese government bond yields soared under the pressure of interest rate hikes, pushing up the downside risk of bond prices. The company said its debt portfolio is mainly composed of 30-year Japanese government bonds. Due to the intensified market selling pressure, the yield hit a record high. Nippon Life said that the actual loss caused by the sale of government bonds last year also reached 500 billion yen.

Arthur Hayes commented that under legal restrictions, life insurance companies can only hold mainly government bonds. If even they start to reduce their holdings, it will have a serious impact on the bond market and may prompt the Bank of Japan to further strengthen its monetary easing operations.