Japan would welcome the European Central Bank’s pledge Thursday to do everything to support the euro if it means offering more direct support to struggling banks in the area, Finance Minister Jun Azumi said Friday.
“Boosting economies (in the area) is an essential issue for ending the European crisis,” Azumi told reporters. “We would welcome it if (ECB President Mario Draghi) meant offering more decisive and direct support” to commercial banks and other entities.
His cautious welcome came after Draghi said Thursday in a speech in London that the ECB stands ready to do whatever it takes to preserve the euro and that addressing excessively high borrowing costs for troubled eurozone governments is within its mandate, a comment that surprised observers and pushed the euro higher and bond yields of troubled eurozone nations lower.
The Japanese government has been on the alert over the yen’s steady rise against the unified European currency, shared by 17 countries, amid concerns that Spain may request a full sovereign bailout to solve its fiscal problems.
But it is still unknown whether Tokyo’s thinly veiled request will be met by any ECB action. Market analysts say Draghi’s pledge signaled the ECB’s intention to resume purchasing European government bonds from the secondary market to help reduce the exposure of financial institutions to the sovereign debt market, but some doubt the intervention will provide more than temporary relief.