By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The euro enjoyed a brief spike higher in Asian trading Tuesday, after Japanese Finance Minister Yoshihiko Noda said his country plans to buy debt to be issued by the European Financial Stability Facility later this month.
“The euro zone is planning to issue a large amount of bonds in a cooperative manner late this month to raise funds to assist Ireland, and it is appropriate for Japan, as a major economy, to buy some of the EFSF bonds to bolster confidence” in Europe’s efforts, Noda said at a news conference, according to Dow Jones Newswires.
“We’re thinking about buying more than 20% of the amount” of EFSF securities to be issued in the initial round, he reportedly said.
The EFSF is a special-purpose vehicle established by the European Union to offer emergency loans to euro-zone countries in the wake of last spring’s Greek debt crisis. It tentatively plans to raise up to €16.5 billion in 2011, and up to €10 billion in 2012.
Noda said Japan would like to make the purchase with euro liquidity in its foreign currency reserves.
The euro (EURUSD 1.2948, 0.0000, 0.0000%) bought $1.2935, after rising as high as $1.2990 earlier. It was buying $1.2951 in late North American trading Monday. The dollar had risen against the euro early in the New York session. See real-time currency quotes and tools.
Against the yen, the euro (EURYEN 107.5700, +0.4800, +0.4483%) was buying ¥107.42, up 0.2%, and down from a high of ¥107.86.
The dollar index (DXY 80.93, +0.05, +0.06%) , which tracks the U.S. unit against a basket of six rivals, rose to 80.991 from 80.870 late Monday.
Against the yen, the dollar (USDYEN 83.0500, +0.3700, +0.4475%) changed hands at ¥83.05, up from ¥82.72 late Monday.
The British pound (GBPUSD 1.5566, -0.0007, -0.0450%) slipped to$1.5549 from $1.5568 late Monday.
