Purchase will help Europe crisis

Plans to buy rescue bonds eyed: Azumi


Staff Writer

The government may purchase additional rescue bonds to be issued by Europe’s bailout fund to help cure the volatile situation triggered by the Greek crisis, Finance Minister Jun Azumi said Tuesday.

“If there is any scheme that could help ease tensions worldwide, including financial markets, over the rescue of Greece, I will not reject the possibility that Japan will share some burdens after being briefed” by European officials on the possible scheme, Azumi told reporters.

But Azumi stressed that discussions on such measures with his U.S. counterpart Timothy Geithner will only take place provided that European nations map out their own outline to resolve the issue.

Earlier reports have said Tokyo may purchase bonds from the European Financial Stability Facility to help address market concerns over fiscal problems in Greece.

Azumi was referring to Japan’s purchase of emergency bonds to be issued by the eurozone’s bailout fund. Tokyo purchased some 20 percent of EFSF bonds issued in January for Ireland and in June for Portugal.

Commenting on the high yen, Azumi reiterated that the government will take “resolute action” when necessary if the yen shows excessive surges against the dollar in the foreign exchange market.

Noting that a disproportionate rise of the yen “may interfere with the strong recovery of the economy” following the March 11 disasters, Azumi warned that any speculative move in the currency market will not be overlooked.

The yen hit a postwar high in August of 75.95 to the dollar. Despite two interventions by the government since March 11, the yen remains at a historic high and is once again nearing the 75 mark.

“We will keep a close eye on the exchange market,” Azumi stressed.

Separately Tuesday, economic and fiscal policy minister Motohisa Furukawa said the government will implement countermeasures against the rise of yen earlier than scheduled due to the pressing circumstances in the forex market.

The measures, which were initially planned to be launched along with the passage of the third supplementary budget, include extending aid programs to midsize companies hit by the strong yen and providing financial assistance for firms lacking subsidies to retain their employees.

“We will act quickly if there is anything we can do. We will pursue other measures” to hold back the negative impact of the strong yen, Furukawa told reporters.

On the delay of the Democratic Party of Japan’s panel discussions over a tax hike proposal, Azumi said the team “must come up with a conclusion within today or tomorrow.”

The government earlier this month proposed two options to cover the ¥11 trillion needed to reconstruct the Tohoku region, including raising the consumption, income, tobacco and other taxes. But the DPJ panel hasn’t been able to reach an agreement, as some of its members still oppose burdening the public with higher taxes.

Azumi said it is preferable that the panel engages in active debate but added that time is running short and discussions with the opposition parties on the tax hike must start as soon as possible.