Business and Personal Finance Dictionary

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• SAMURAI BONDS
  
  Definition: Yen-denominated bonds that foreign companies or governments issue in the Japanese market. Example: In July 2001 Brazil sold in Japan ¥200 billion of two-year Samurai bonds, yielding 3.75%. Application: Samurai bonds appeal more to Japanese investors than ordinary foreign bonds, denominated in the foreign currency, because the they avoid the possibility of loss due to devaluation or depreciation of the foreign currency relative to the yen. Comment: In July 2001 the two-year swap rate in Japan was about 0.17%. Consequently, the 3.75% coupon on Brazil's issue of` Samurai bonds appears to reflect a credit risk premium.
  
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