Samurai Bond
Quick Definition
A yen-denominated bond issued in Japan by a non-Japanese entity, subject to Japanese regulations.
Key Takeaways
- Yen-denominated bonds issued by non-Japanese entities in Japan
- Provides access to Japan's deep capital markets
- Eliminates currency risk for Japanese investors
- Similar to Yankee bonds (USD) and Bulldog bonds (GBP)
What Is Samurai Bond?
A samurai bond is a yen-denominated bond issued in the Japanese market by a foreign borrower — a government, corporation, or supranational organization — and subject to Japanese financial regulations. Named after the Japanese warrior class, samurai bonds allow foreign issuers to access Japan's deep capital markets and its large pool of domestic savings. For issuers, samurai bonds can provide yen funding at potentially lower rates than available in their home markets, or serve as a natural hedge for Japanese operations. For Japanese investors, samurai bonds offer diversification into foreign credit risk while avoiding currency risk since the bonds are denominated in yen. Similar foreign bond concepts exist in other markets: Yankee bonds (USD, U.S. market), Bulldog bonds (GBP, UK market), and Kangaroo bonds (AUD, Australian market).
Samurai Bond Example
- 1The World Bank issues samurai bonds in Tokyo to raise yen funding for development projects
- 2Apple issued ¥250 billion in samurai bonds to fund share buybacks while taking advantage of Japan's low interest rates
Related Terms
Yankee Bond
A U.S. dollar-denominated bond issued in the United States by a foreign entity, registered with the SEC.
Eurobond
A bond issued in a currency different from the currency of the country where it is issued, allowing borrowers to access international capital markets.
Sovereign Bond
A debt security issued by a national government, considered the benchmark for credit risk and interest rates in that country.
Corporate Bond
A debt security issued by a corporation to raise capital, paying periodic interest and returning principal at maturity.
Bond
A fixed-income debt security where investors loan money to an issuer in exchange for regular interest payments and return of principal at maturity.
Treasury Bond (T-Bond)
A long-term U.S. government debt security with a maturity of 20 or 30 years, paying semiannual coupon interest.
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