Japan vows to support Europe in its battle to contain debt crisis

PanARMENIAN.Net - Japan will continue to support Europe in its battle to contain a debt crisis, Finance Minister Yoshihiko Noda said Tuesday, June 21, as eurozone officials try to avoid a potentially damaging Greek default, AFP reported.

Japan has previously pledged to help boost confidence in the bonds issued by the European Financial Stability Facility (EFSF), amid concerns earlier this year for eurozone nations such as Portugal and Ireland.

But market fears are now centered on Greece, which received a multi-billion-dollar bailout last year but is struggling to meet a deadline to pay a loan installment and avoid a sovereign default.

"Japan has been making its own contributions to bring stability to European financial conditions, such as by buying debt (issued by the rescue fund) during efforts to support Portugal," Noda said at a news conference following a cabinet meeting Tuesday.

"We'd like to continue those efforts," he said.

The world's second-largest holder of foreign currency after China, Japan bought about two billion euros ($2.9 billion) of bonds in programs launched to date by the eurozone-backed EFSF in January and in mid-June.

Japan's efforts to assist Europe may be driven by concerns that the continent's sovereign debt turmoil poses a threat to European demand for Japanese goods or send the yen higher against the euro, say analysts.

Greece was on Monday given a two-week deadline to drive through drastic new cuts before it can receive a 12-billion-euro payment to ensure it does not default.