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Japan May Take Part in Greece Rescue Plan

Japan May Take Part in Greece Rescue Plan

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Published by Commercial Gate

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Categories:Types, Business/Law
Published by: Commercial Gate on Sep 27, 2011
Copyright:Attribution Non-commercial


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Japan may take part in Greece rescue plan

Japan said that it would consider being part of global Greece bailout plan. Japan’s finance minister Jun Azumi said that Eurozone countries need to come up with a rational plan to ease global debt concerns. Mr. Azumi’s comments come a day after the index Nikkei 225 fell to a two and a half year low, amid fears that the debt crisis may slow down the global economic growth. However, on Tuesday Nikkei rose again. "If there is a scheme that is based on a firm process, involves a reasonable amount of money and could provide the world and markets with a sense of security regarding a Greek bailout, I would not rule out the possibility of Japan sharing some of the burden," Mr Azumi was quoted as saying. Analysts said Japan’s willingness to consider sharing some of Greece’s bailout burden stemmed from the fact that it wanted to ensure stability in the region. Europe is a key market for Japanese exports and there are concerns that if a solution to the ongoing debt crisis is not found soon it may hurt growth and dent demand for Japanese goods. ‘’If the financial turmoil spread from Europe to the rest of the world, than Japan will not be immune’’, said Masaaki Kanno from JP Morgan. Growing uncertainty in Europe may force investors to reorganize their attention to the traditional currencies such as Japanese Yen. That may bring a strengthening even further of the Japanese currency against US Dollar and Euro. A strong currency not only makes Japanese products more expensive, but also hurts the profits of companies when they repatriate their foreign earnings back home. At the same time the crisis has resulted into sharp falls at the Tokyo Stock Exchange. Mr. Kanno also said that a continuing fall could affect Japan’s economy. "Japanese banks and insurance companies are big investors in stock markets and if the Nikkei continues to plunge, it will send the domestic financial system in turmoil’’. European governments are in trying to find the best solutions to avoid spreading the debt crisis from Greece to the rest of the continent. www.commercial-gate.com

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