09/04/2010 00:00 AST

The Japanese government bond yield curve remained under flattening pressure on Friday as the superlong sector stayed bullish on continuing purchases from investors such as life insurers, while the market awaited a meeting between the government and the Bank of Japan later in the day.

Futures gained on the strength in superlong debt, which has outperformed the long-end this week on steady buying from investors such as pension funds and life insurers allocating their funds for the new fiscal year which began on April 1.

Mitsui Life Insurance Co said in an interview with Reuters on Thursday that Japan's fifth-largest life insurer is likely to buy 100 billion yen ($1.07 billion) in superlong bonds in the current financial year.

Japan's top nine insurers hold around $1.6 trillion in assets -- about the size of Brazil's economy -- and their investment moves are watched closely by both domestic and overseas market players. For the latest life insurer interview series, click on.

Dealers have also been buying superlongs to replenish their inventories after trimming their books to reduce risk exposures before the previous fiscal year ended on March 31, market players said.

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Guardian.co.uk

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