Today, Japanese Finance Minister Noda said that Japan would use its existing euro foreign exchange reserves to buy a large portion of the bondsissued by the European Financial Stability Fund. “There is a plan for the euro zone to jointly issue a large amount of bonds late this month to raise funds to assist Ireland. It’s appropriate for Japan to make a contribution as a leading nation to increase trust in the deal. We want to buy more than 20 percent.”
Japan joins China in pledging to buy European debt to quell the uncertainty surrounding the sovereign debt and bailouts. Last week, Chinese Vice Premier Li Keqiang pledged to buySpain’s debt and expressed confidence in Spain’s financial markets. It appears to be a global effort to stabilize the European debt situation and more nations may be participating. (Rumors were that Brazil was buying Portuguese debt, Fin Min Mantega denied the reports.)