Japan to help Europe through IMF

Japan said yesterday it was ready to answer an International Monetary Fund call for extra cash to help Europe steer a course through its sovereign debt crisis, a report said.
“Japan is prepared to support European efforts to stabilise the market, including through lending to the IMF, based on strong efforts by European countries,” Dow Jones Newswires quoted an unnamed senior government official as saying.
Tokyo would do so in collaboration with other G20 advanced and emerging economies, the official reportedly said.
However, the United States, the IMF’s biggest stakeholder, has so far ruled out writing any more cheques.
“Japan will consider making contributions if necessary,” a Japanese finance ministry official told AFP.
But the official said, on customary condition of anonymity, that Tokyo would like to see the eurozone do more “as the crisis started in Europe, and the European countries also have the capability to cope with it”.
The IMF said Wednesday it needs up to USD 500 billion in extra cash to mitigate the risks that the growing European debt crisis poses to the global economy.
With several European countries veering towards recession and Greece on the brink of default, the IMF said it lacks the capacity to be the planet’s lender of last resort.
The fund said the extra USD 500 billion includes a recent European commitment to add about USD 200 billion to its resources.
Japan has been a regular buyer of debt issued by the European Financial Stability Facility bailout fund since last year.
A strong yen and sinking demand in key European markets have dented Japan’s export-oriented economy.
The issue of boosting the IMF’s firepower is likely to be high on the agenda of a G20 finance chiefs’ meeting on February 25-26 in Mexico, which holds the group’s presidency this year.