Japan may increase its purchases of bonds to finance Europe’s debt crisis rescue fund, Chief Cabinet Secretary Osamu Fujimura said Wednesday.
Fujimura told reporters the government “would like to consider” buying more bonds from the European Financial Stability Facility to help stabilize the region.
Japan bought more than 20 percent of the fund’s initial five-year, €5 billion ($6.6 billion) bonds in January, and purchased another €1.1 billion of 10-year EFSF bonds issued in June.
“Europe’s fiscal problem is also very important for Japan in terms of restoring market confidence, and the Europeans are grappling with this,” Fujimura said.
Japanese officials are urging their European counterparts to carry out a rescue of Greece as quickly as possible as concern over the crisis has sent the euro to a decade low against the yen.
Finance Minister Jun Azumi said Tuesday that euro-region countries must “make the process of rescuing Greece more transparent to the markets.”
The 17-nation European currency weakened Wednesday against the yen and dollar after a downgrade of Italy’s credit rating added to concern the region’s debt crisis will worsen.
Sony Corp. is “especially concerned” about weakness in the euro, Vice Chairman Ryoji Chubachi said Tuesday at an industry convention near Tokyo. A continued drop in the currency will mean “trouble worldwide,” Toshiyuki Shiga, chief operating officer of Nissan Motor Co., said at the same convention.
“Japan must correct” the yen’s strength, or “otherwise, no one will make investments,” Shiga said.
$43 billion in JBIC credit
The Japan Bank for International Cooperation will offer a combined $43 billion credit line to the nation’s three biggest banks in a bid to counter the strong yen and help finance Japanese companies’ acquisitions abroad.
Under the agreement signed Wednesday, JBIC is offering a $15 billion credit line to Bank of Tokyo-Mitsubishi UFJ, a unit of Mitsubishi UFJ Financial Group Inc., JBIC said in a statement on its website. The banking units of Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. meanwhile each received $14 billion in credit under the pact.
Prime Minister Yoshihiko Noda’s administration is under pressure to help companies weather the yen’s 8.6 percent rise against the dollar over the past year. The deal is aimed at helping banks procure dollars and offer loans to companies planning overseas takeovers, the statement said.
The credit lines are part of a government program unveiled in August to release $100 billion worth of foreign exchange reserves to the government-owned lender to fund exporters and spur purchases overseas, the statement said.
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