NUSA DUA, Indonesia (Kyodo) Japan will be ready to offer support worth ¥10 trillion to Asian countries if they suffer serious problems stemming from the global economic crisis, Finance Minister Kaoru Yosano said Sunday.
Yosano said about ¥6 trillion of the total would be provided from Japan’s foreign reserves using a currency swap deal. Under the framework, a crisis-hit Asian country could change the Japanese currency into dollars or other major currencies if necessary.
Yosano, in Indonesia to attend an annual gathering of the Asian Development Bank, said Japan will also commit $38.4 billion (about ¥3.8 trillion) to the Chiang Mai Initiative, a regional currency swap framework formed by China, Japan, South Korea and 10 Southeast Asian countries.
In addition, the Japan Bank for International Cooperation will start providing a guarantee of up to ¥500 billion when a country in the region issues yen-denominated samurai bonds, Yosano said.
Yosano unveiled the new steps to support Asia’s liquidity at a news conference after holding talks with his counterparts from China and South Korea on Indonesia’s Bali Island.
The 13 countries agreed in February to expand the pool of the multilateral currency swap arrangement to $120 billion from $80 billion, with China, Japan and South Korea promising to contribute 80 percent of the total.
China, which has the world’s largest foreign reserves, will provide the same amount as Japan to the enlarged swap arrangement and South Korea will offer $19.2 billion, according to Japanese officials.
Yosano, meanwhile, touched on fears of the swine flu outbreak turning into a global pandemic.
It “could turn into another global crisis,” he said. “Countries should work together to prevent the spread of the flu, or the situation could be too late.”
The World Health Organization is monitoring the global situation and could raise its six-notch alert level to its highest level.