AI Funding Race Spreads to Japan, as Yen-Denominated Bond Issuance Hits Record $16 Billion

Japanese yen bond issuance by foreign entities hit a record high of approximately ¥2.5 trillion (~$15.9 billion) between April and September, up 160% year-over-year and surpassing the previous record of ¥2.1 trillion set between October 2018 and March 2019, according to Daiwa Securities data cited by Nikkei. The surge reflects a global AI funding race, as overseas hyperscale cloud providers tap Japanese investors to bankroll AI infrastructure buildouts. Alphabet led the way with a debut ¥576.5 billion yen bond issuance in May, the largest ever by a foreign issuer, with proceeds expected to fund large-scale AI infrastructure investment. Most foreign issuers convert yen proceeds into dollars, euros, and other currencies, per a major brokerage source. The trend underscores Japan's deep pool of low-yielding domestic capital becoming a key funding source for the global AI capex boom. Watch for additional mega-sized yen bond deals from US tech issuers and whether the Bank of Japan's rate path alters the appeal of yen funding.