IntroductionSukuk is nomarlly known as an Islamic or Sharia obey ‘Bond’ simultaneously in actual fact; it is an asset-backed trust certificate. In its simplest form Sukuk is a certificate evidencing ownership of an asset .The Sukuk structures rely on the creation of a Special Purpose Vehicle (SPV). Sukuk whose singular is sakk and a recent reform that allows Islamic Finance to participate in yet another area of conventional finance. In Islamic, fixed income and called as interest (riba) bearing bonds are not permissible.It is principles prohibit the charging, or paying of interest.Financial assets that obey with the Islamic law can be classified in the secondary markets. Based upon existing Islamic Financial transactions, sukuk offer Islamic financial institutions and investors another way to raise capital through profit sharing without a prime rate, but achieving the same result as conventional finance. Sukuk appear to be a product that contributes to and accelerates the process of concentrate between the world of Islamic Finance and that of conventional finance, sparking a convergence based upon common interests and principles. Under certain circumstances, these sukuk may be traded on secondary markets, contributing to their general accessibility and popularity and perhaps to the emergence of certain hubs of Islamic Finance through out the world where these sukuk are traded.Modern sukuk or Islamic bonds are better described as Islamic investment certificates. This difference is as crucial as it is important, and it is stressed throughout this founding work that sukuk should not simply be regarded as a substitute for conventional interest-based securities. The aim is not simply to engineer financial products that copy fixed-rate bills and bonds and floating-rate notes as understood in the West, but rather to develop innovative types of assets that comply with Shari’a Islamic law.In classical period Islam sakk (sukuk) – which is synonym with the European root ‘cheque’, meant any document representing a contract or conveyance of rights, obligations or currency done in unity with the Shariah. Experiece evidence shows that sukuk were a product extensively used during medieval Islam for the transferring of financial obligations founding from trade and other commercial activities.Sukuk are widely regarded as controversial due to their perceived purpose of evading there strictions on Riba. This can be regarded as the fundamental test of interest. Sukuk offer investors fixed return on their investments which is also similar in appearance to interest in that the investor’s return is not necessarily dependent on the risks of that particular venture.Sukuk market in Malaysia enjoys advantages of proactive stanceMalaysia’s sukuk, or Islamic bond, market benefits from having a large and diverse investor base, including some non-Islamic as well as Islamic investors, and strong growth in sukuk assets in recent years has underlined the advantages of Malaysia’s proactive stance on market developmentMalaysia’s corporate sukuk market “is significantly, bigger in terms of new issuances this year than the conventional corporate bond market,” Arshad Mohamed Ismail, the head of global banking business at May Bank, a significant player not only in Malaysia but also in global terms, tells The National.” Malaysia is a huge market where issuers are free to issue conventional bonds as well as sukuk and where you have conventional investors and Islamic investors,” he says. Global investors “have become very familiar with the sukuk financual contract.Examples of sukuk issuance by Japanese companies Actual sukuk issuances by Japanese companies are still few. Aeon Credit Service Malaysia became the first Japanese company to issue sukuk in 2007, and Toyota Financial Services’ Malaysian subsidiary, UMW Toyota Capital (UMWTC, now called Toyota Capital Malaysia) was next with a sukuk issuance in 2008. Both of those issues used a musharaka scheme. Nomura Holdings issued an ijarah sukuk backed by aircraft leases in 2010. More recently, in September 2014, The Bank of Tokyo-Mitsubishi UFJ issued the world’s first yen-denominated sukuk raising ¥2.5 billion, and a US$-denominated sukuk raising US$ 25 million of funding. On the other hand, global financial institutions like Nomura Holdings and BTMU are motivated to enter this market to (1) diversify their funding sources by region and currency, (2) raise funds aimed at providing sharia-compliant financial services to the local market, (3)improve their image and name recognition in the Islamic world, (4) gain access to investors in Southeast Asia and the Middle East, (5) assume the role of an arranger for future Japanese sukuk issuances (a longer-term objective of accumulating expertise and helping other Japanese companies obtain funding through sukuk), and (6) strengthen their relationships with governments seeking to develop Islamic financial markets and with major market players.