Shogun Bond

A Shogun bond is a bond which is issued in Japan by a foreign borrower, and denominated in a currency other then the Japanese yen.

This sets it apart from a Samurai bond, which is also issued in Japan by foreign borrowers, but is denominated by the Japanese yen. Shogun bonds also differ from euroyen bonds, which are denominated by the Japanese yen but are issued in countries other than Japan, and sushi bonds, which are issued outside of Japan by Japanese borrowers and denominated by a currency other than the Japanese yen.

Shogun bonds make it possible for investors to invest currencies other than Japanese yen in bonds which are governed by Japan’s regulatory regime.

For example, investors can use Shogun bonds denominated by the Chinese yuan to invest Chinese yuan in bonds issued by a Chinese company. These investors benefit from the added security provided by Japan’s established regulatory regime as opposed to China’s developing regulatory regime.

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