Japanese companies rushed to the international bond market in 2025, with issuance particularly strong from those rated triple-B or lower as they sought duration and size in foreign currencies.
They issued a record $100bn-equivalent in foreign currency bonds last year, a surge driven by a big refinancing wall and a global search for yield by investors in a volatile rate environment, says Masanori Kazama, an executive director in Nomura Securities’ international debt capital markets team in Tokyo.
“Investor appetite in the domestic market in Japan is skewed towards the shorter end of the curve in general and is very sensitive to forecasted rate hikes,” Kazama tells GlobalCapital. “Japanese corporate issuers have searched for alternatives where they can achieve duration and size. Naturally they were led to the dollar market where there was more room for risk taking by investors. Also, there are increasingly more Japanese corporate issuers seeking to diversify their funding sources as part of their corporate strategy.”
A number of high profile issuers turned to international bond markets last year.
For example, sub-investment grade SoftBank Group Corp raised about $4.2bn-equivalent from a multi-tranche euro/dollar combo deal in July 2025 that received a combined orderbook of more than $15.5bn, shows Dealogic. It followed that up with a triple-tranche $2.87bn-equivalent euro/dollar outing in October 2025, and priced domestic deals in April, August and November last year.
Nissan Motor Co took $3bn in July and an additional €1.3bn the same month, while chipmaker Kioxia Holdings Corp raised $2.2bn in July from its debut dollar transaction.
Technology conglomerate Rakuten Group has been more strategic. It last sold a dollar bond in December 2024 and had printed multi-billion dollar deals to address its 2024-2025 maturities, but pivoted back to the domestic market last year as credit spreads tightened.
But Kazama says there is “very strong” need from Japanese corporates for international debt, so broader issuance will be strong in 2026 and could match the amount raised in 2025.
“While US hyperscalers have catalysed a surge in debt markets through massive AI-related infrastructure investments, we anticipate a parallel trajectory for Japanese corporates as their domestic AI funding requirements intensify. Furthermore, M&A-driven financing is expected to remain a structural tailwind, potentially fuelling a sustained expansion in Japanese offshore bond supply,” adds Kazama.
He reckons this trend can continue beyond 2026 — as long as the market conditions remain similar. “Dollars and euros would likely be the obvious places where Japanese corporate issuers would find duration, size, risk appetite, but that does not exclude other currencies,” says Kazama.
Against this backdrop, GlobalCapital conducted an interview with Jeremy Tonkin, senior adviser, investor relations, at Rakuten Group to discuss the company’s past and future issuance plans and strategy.
Interview: Jeremy Tonkin, Rakuten GroupGlobalCapital: What is the role of offshore markets within Japanese corporates’ like Rakuten Group’s overall funding strategy? 
Jeremy Tonkin, Rakuten Group: Tapping offshore credit markets has allowed Rakuten Group to diversify its funding sources and expand its global investor base, spreading the credit story of Rakuten more widely. Rakuten could demonstrate that financing can be carried out in the foreign bond market during the investment phase of our mobile business. More generally, we could appeal not only to investors, but also to banks and rating agencies that we have the ability to secure a variety of funding methods or liquidity as we grew our mobile business. GlobalCapital: What is the motivation for Rakuten to tap offshore bond markets? How do costs offshore compare versus Japanese yen bonds and how has this dynamic changed in the past 12 to 18 months? Tonkin: When we issue in non-yen currencies, being domiciled in Japan, the intention is to swap the non-yen funds into Japanese yen. Considering the swap market situation in recent years, it has been possible to fix the yen interest rate at about half the US dollar interest rate. This means for Rakuten, rather than a relatively high dollar nominal coupon at around either side of the 10% level which credit investors could enjoy, the interest cost to Rakuten has been around half that level. FY2025 Funding
FY2025 Bond Issuances Improved cash conversion cycle Source: Rakuten Group’s FY2025 consolidated financial results report, published in February 2026 This said, 2025 was a watershed year in Rakuten’s credit history, to refocus on domestic yen issuance. In July 2025, we issued our first yen sustainability bonds, and in August 2025 we issued ¥130bn ($816m) in domestic retail bonds. In October 2025, we issued domestic perpetual subordinated bonds. We believe that being the first non-financial Japanese company to issue yen-denominated perpetual subordinated bonds of size with capital recognition from rating agencies was not only significant for the diversification of our fundraising methods, but also important for the domestic bond issuance market. In addition, we continued to make progress in our cash conversion cycle, achieving significant improvement year-on-year. Compared with the last dollar bond in December 2024, this yen-denominated perpetual subordinated bond in Japan issued in October 2025 received strong demand from both 0domestic and overseas investors. The coupon was 4.691%, approximately 50bp lower than the post-currency swap rate on the December 2024 dollar-denominated perpetual subordinated bond, reflecting our credit standing’s significant improvement during 2025. GlobalCapital: Rakuten last sold a dollar bond in December 2024. What are its future fundraising plans? Tonkin: Currently, Rakuten’s financial strategy has not set a specific ratio of yen to foreign currency. Whether we issue in dollars or euros, and swap back to yen, or in yen, we will always consider optimal refinancing methods from the perspective of funding capacity, funding costs, diversification of fundraising methods, domestic and global market environment, accounting capital certification, expansion and diversification of our investor base, and alternative financial instruments. We have a variety of options at our disposal which we can consider, even in volatile environments like the present time. However, while Rakuten is likely to remain as a potential future issuer in the global and domestic bond markets for refinancing purposes, we are aiming to reduce the group’s interest-bearing debt balance over the longer term, actively control our bond redemption schedule, while increasing non-fintech or internet services and mobile Ebitda, and further improve our ability to generate cash flow. The non-fintech net interest-bearing debt to Ebitda ratio was 6.5x for the 2025 financial year. Our intention is to reduce that to six times for FY2026 and to less than five times in the longer term. Future Financing Policy
Funding needs for Mobile business Funding needs for corporate bond redemptions Source: Rakuten Group’s FY2025 consolidated financial results report, published in February 2026 GlobalCapital: What is the investor perception of Japanese triple-B rated credits offshore? Tonkin: We believe the market has recognised our consistent, proactive initiatives to implement financial strategies that strengthen our financial structure. Our credit outlooks from domestic rating agencies were also revised upward to stable in 2025. Since our first issuance of dollar and euro bonds in 2021, Rakuten has held numerous non-deal and deal roadshows, both in person and by Zoom, in the major credit centres of the US, Tokyo, Hong Kong, Singapore and London. The global credit investor base is now familiar with Rakuten’s business model and financials and is comfortable with our governance. We will continue to engage with global credit investors through NDRs, which we do at least once a quarter. Rising prices of dollar bonds issued in past years and the lowering of our five-year CDS spreads also reflect improvements in our credit profile. We will continue to work diligently on financial improvement and deepen dialogue with the market to further enhance our evaluation. GlobalCapital: Would Rakuten consider other currencies beyond dollars and euros for its international debt issuance? Tonkin: We issued euro bonds in 2021 and swapped them back to yen. All currencies and funding instruments can be considered. We plan to constantly select the optimal currency and funding method while assessing domestic and international market trends, considering factors such as funding capacity, funding costs, diversification of fundraising methods, and the expansion and diversification of our investor base. GlobalCapital: What challenges have you faced when going offshore — and how did you mitigate them? Tonkin: For a business like Rakuten, which has 70-plus services in Japan and 200-plus subsidiaries, it has often taken time to ensure that the IR credit story is being appropriately explained and delivered to the investor base, at a time of capital markets confusion triggered by global political and macro instability in recent years. However, Rakuten has strong and professional finance and IR teams, and has been actively engaging with global credit investors for the last five years. GlobalCapital: What are your concerns around downgrade risks and rating volatility and how these can affect investor appetite and your funding strategy? Tonkin: Because Rakuten Group has fintech businesses under its umbrella, maintaining a high rating is an important theme of our financial capital strategy, ensuring stable fundraising and reducing financial costs. In addition to significantly strengthening our financial base through various non-interest-bearing debt financing methods, we aim to achieve a balance between investment and financial performance and maintain or improve our rating by improving leverage through profitability in our mobile business. We hope to return to investment grade status with S&P as soon as possible. |
