Samurai Bonds Are Back in Demand
U.S. companies are increasingly issuing yen-denominated Samurai bonds to tap into Japan’s cheaper capital.
Why?
– High U.S. rates make domestic borrowing expensive
– Tight JPY-USD cross-currency basis lowers the cost of converting yen to dollars
– Samurai bonds let firms borrow more cheaply and diversify investors
With favorable funding conditions in Japan, expect more U.S. corporates to follow this route.