Blossoming forex
Persistently low interest rates in Japan have made long-dated FX-linked structured products firm favourites among retail investors. To meet the demand for such products, issuers are selling FX-linked target redemption structured notes as well as distributing Uridashi bonds. Amanda Lee reports
Securities houses in Japan have for a long time offered foreign exchange-linked structured products to investors hungry for high yield in the midst of what is a prolonged low interest-rate environment.
Typically, financial institutions have been selling structured products such as Bermudan multi-callable power-reverse dual-currency notes (PRDCs) to securities houses in Japan. PRDCs are principal-protected notes that pay a high initial coupon, ranging from 4-7%, with maturities of 30 years or more
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