By
Nikita Bundzen Head of North America Fixed Income Department
Updated January 14, 2025
What is a Sushi Bond?
A sushi bond is an international bond, denominated in a currency other than the yen (primarily in U.S. dollars), issued by a Japanese company on the international markets. These bonds offer investors an opportunity to explore diverse Japanese-inspired selections in the financial market.

Sushi Bonds Explained
Sushi bonds typically offer fixed interest rates and can have varying terms, catering to both short-term and long-term investment strategies. They're attractive to Japanese investors, especially when the yen's value is weaker, as they provide an opportunity for currency diversification outside the jurisdiction of the Bank of Japan (BoJ).
Japanese institutional investors, including corporations and insurance companies, often seek sushi bonds to diversify their bond portfolios and take advantage of low-cost financing. Moreover, these bonds help Japanese companies capitalize on investment opportunities and refinance foreign currency liabilities.
Despite being foreign currency bonds, sushi bonds are predominantly traded among Japanese investors, both in primary offerings and secondary markets. This unique characteristic distinguishes them from other international bonds. Additionally, the attractiveness of sushi bonds fluctuates with currency exchange rates, influencing both buying and selling decisions.
The list of sushi bonds in circulation is available at the Cbonds Bondscreener.
Advantages and Disadvantages
Advantages of sushi bonds
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Regulatory Arbitrage. Sushi bonds provide an avenue for regulatory arbitrage, allowing Japanese companies and investors to navigate regulatory requirements more favorably. By issuing bonds in foreign markets, they can avoid certain regulations and achieve more advantageous outcomes.
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Access to Diverse Funding Sources. Sushi bonds offer Japanese companies access to a diverse range of funding sources beyond their domestic market. This can be particularly beneficial when domestic financing options are limited or expensive.
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Currency Diversification. Issuing bonds in foreign currencies allows Japanese companies to diversify their currency exposure, reducing the risk associated with fluctuations in the value of the yen. This can provide stability to their financial operations and improve risk management.
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Investor Demand. Sushi bonds attract investors seeking exposure to diverse investment opportunities, including those interested in Japanese corporate bonds but prefer investing in foreign currencies. This broadens the investor base and potentially lowers borrowing costs for Japanese issuers.
Disadvantages of Sushi Bonds
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Market Volatility and Liquidity Risks. Sushi bonds are subject to market volatility and liquidity risks associated with foreign bond markets. Fluctuations in interest rates, exchange rates, and investor sentiment can impact the value and liquidity of these bonds.
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Credit and Default Risk. Just like any other bond, sushi bonds carry credit and default risk. Investors face the possibility of losses if the issuer fails to meet its debt obligations. Assessing the creditworthiness of Japanese issuers in foreign markets may pose challenges for investors.
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Regulatory and Legal Considerations. Issuing sushi bonds involves navigating regulatory and legal considerations in foreign jurisdictions. Compliance with foreign laws, tax regulations, and disclosure requirements adds complexity and potential costs to the issuance process.
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Dependency on Foreign Markets. Japanese companies reliant on sushi bonds may become overly dependent on foreign markets for funding. Changes in foreign market conditions or disruptions in global financial markets could adversely affect their ability to raise capital or refinance existing debt.