Citigroup will this month tap the Japanese market for the second time this year to raise funds with a Y315bn ($2.91bn) record samurai bond issue aimed at retail investors seeking higher yields.

The Japanese market has become increasingly important to financial institutions as a place to raise funds. Demand has been relatively resilient in the face of the credit crunch due to calmer local conditions and a search for higher yields, given domestic base interest rates of 0.5 per cent.

So far this year there have been 56 samurai issues – yen-denominated debt issued by foreign entities to Japanese investors – worth Y1,708.7bn, a 32 per cent increase from the same period last year, according to Thomson Reuters data. Citi raised Y186.5bn in samurai bonds in June.