TOKYO, Oct 5 (Reuters) - Japan plans to buy more bonds issued by Europe's bailout fund to help contain the euro-zone debt crisis, the Nikkei business daily reported, as financial markets remain jittery about growing prospects for a default by Greece.
Japan, which already holds 20 percent of the total bonds issued by the European Financial Stability Facility (EFSF), will decide the purchase amounts and timeline based on issuance terms and market conditions, the daily said.
Finance Minister Jun Azumi told reporters on Wednesday that the government has not decided whether to increase its purchases of bonds by Europe's bailout fund.
Euro-zone parliaments are expected to complete approval of new powers for the 440 billion euro ($584 billion) bailout fund by mid-October, giving it scope to intervene on bond markets and help recapitalise banks.
Japan currently owns bailout bonds worth about 2.7 billion euros ($3.6 billion), after it purchased them in January and June, with the proceeds used to bail out Ireland and Portugal.
Azumi is expected to explain Japan's plans for additional purchases on Oct. 14 in Paris when finance ministers and central bankers of the Group of 20 nations meet, the paper said.
Azumi said last week he would not rule out Japan sharing some of the burden related to a bailout scheme for Greece, provided that Europe mapped out a rational plan that could ease market jitters.
Tokyo hopes to play a role in stabilising financial markets as fears have heightened about a Greek default and a major banking crisis in Europe that would aggravate the global economic slowdown.
Japan's euro bond purchases also have the effect of propping up the euro, which has sunk to a decade low versus the yen, the Nikkei said.
For the additional purchases, Tokyo has floated the idea of issuing financing bills (FBs) instead of tapping foreign reserves as it previously did, which would have the effect of lifting the euro versus the yen, the Nikkei said.
But such a move may draw the ire of European countries that are cautious about currency market intervention, it said.
Source: www.reuters.com
Japan, which already holds 20 percent of the total bonds issued by the European Financial Stability Facility (EFSF), will decide the purchase amounts and timeline based on issuance terms and market conditions, the daily said.
Finance Minister Jun Azumi told reporters on Wednesday that the government has not decided whether to increase its purchases of bonds by Europe's bailout fund.
Euro-zone parliaments are expected to complete approval of new powers for the 440 billion euro ($584 billion) bailout fund by mid-October, giving it scope to intervene on bond markets and help recapitalise banks.
Japan currently owns bailout bonds worth about 2.7 billion euros ($3.6 billion), after it purchased them in January and June, with the proceeds used to bail out Ireland and Portugal.
Azumi is expected to explain Japan's plans for additional purchases on Oct. 14 in Paris when finance ministers and central bankers of the Group of 20 nations meet, the paper said.
Azumi said last week he would not rule out Japan sharing some of the burden related to a bailout scheme for Greece, provided that Europe mapped out a rational plan that could ease market jitters.
Tokyo hopes to play a role in stabilising financial markets as fears have heightened about a Greek default and a major banking crisis in Europe that would aggravate the global economic slowdown.
Japan's euro bond purchases also have the effect of propping up the euro, which has sunk to a decade low versus the yen, the Nikkei said.
For the additional purchases, Tokyo has floated the idea of issuing financing bills (FBs) instead of tapping foreign reserves as it previously did, which would have the effect of lifting the euro versus the yen, the Nikkei said.
But such a move may draw the ire of European countries that are cautious about currency market intervention, it said.
Source: www.reuters.com
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