* First non-European nation to commit new funds
* Japan’s finance minister says hopes other nations to
follow
* IMF has said it is seeking $600 bln in new funds
* Japan commitment comes ahead of IMF, G20 meetings
By Tetsushi Kajimoto
TOKYO, April 17 (Reuters) – Japan said on Tuesday it will
provide $60 billion in loans to the International Monetary Fund,
becoming the first non-European nation to commit new money to
boost the fund’s firepower to contain the euro zone debt crisis.
Finance Minister Jun Azumi said Japan hoped Tokyo’s
contribution, which will be formally announced at a Group of 20
meeting in Washington later this week, will encourage other
countries to follow suit.
“I am confident that many other countries will pledge
contributions to the IMF,” Azumi told a regular news conference
after a cabinet meeting.
“Following a series of euro zone’s policy responses, it is
important to strengthen IMF funding and pave the way for
ensuring an end to the crisis not only for the euro zone but
also for Japan and Asian countries,” Azumi said.
The IMF, which acts as a lender of last resort for
governments, said in January it would need $600 billion in new
resources to help “innocent bystanders” who might be affected by
economic and financial spillovers from Europe.
But last week, IMF Managing Director Christine Lagarde said
it might not need as much money as it had thought because
economic risks had waned and G20 officials told Reuters the
world’s major economies were likely to agree to provide between
$400 billion and $500 billion.
Euro zone countries have committed about $200 billion and
other European Union nations additional $50 billion.
But other major economies, including leading emerging
countries such as China, Brazil and Russia, have been holding
off from making firm commitments, saying they were willing to
chip in, but were looking to get more voting power in return.
Japan’s announcement comes just days ahead of the IMF and
World Bank Spring Meeting and a G20 meeting in Washington.
Financial markets are once again showing increased concern about
the euro zone debt crisis, highlighted by soaring Spanish
borrowing costs.
Spain’s 10-year government bond yields rose
above 6 percent on Monday for the first time since the beginning
of December, fuelling concerns that Madrid could fail to meet
budget deficit targets as the country acknowledged it has
probably tipped into its second recession since 2009.
That would raise the risk that the euro zone’s
fourth-largest economy might need an international bailout.
