Japan Post Bank Co said on Friday Japanese government bonds (JGBs) accounted for 38.8 percent of its $1.95 trillion investment portfolio at the end of June, down from 40.1 percent at the end of March.
Sister firm Japan Post Insurance Co said its JGB holdings were 53.2 percent of its $820 billion investment portfolio, compared with 54.2 percent three months earlier.
The two companies are major units of giant state-controlled mail service and financial firm Japan Post Holdings Co, and their holdings in government bonds are closely watched by other market players gauging their investment strategies.
As recently as three years ago, JGBs accounted for 70 percent of Japan Post Bank’s investment portfolio. But the bank has been reducing its JGB holdings as yields on government debt have been driven down by the Bank of Japan’s aggressive monetary easing policies, including the adoption of negative interest rates earlier this year.
Investment activity generates the bulk of the bank’s profits since it is banned from the lending business to protect private-sector competition.