Japan pledges $60.0 bn to IMF for Europe firewall

Japan said Tuesday it would give the International Monetary Fund $60.0 billion as part of the organisation's bid to boost a global firewall against Europe's debt crisis. The decision comes several days before a Group of 20 finance chiefs' meeting in Washington that is expected to focus on the issue as fresh concerns over the region arise, with Spain now in sight as its borrowing costs spike. It makes Japan the first non-eurozone country to announce a pledge, which will be formally announced at the talks starting Friday. Eurozone contributions have so far hit $200.0 billion. "Finance Minister (Jun) Azumi announced plans today that Japan will provide $60.0 billion in order to strengthen the financial base of the IMF," a ministry spokesman said. Azumi said he thought it was "important to make public our attitude if we are to help forge an early agreement," Dow Jones Newswires quoted him as saying. IMF chief Christine Lagarde late Monday welcomed Tokyo's contribution and urged other member states to follow suit. "This is an important step forward... to prevent and fight crises and to promote global economic stability," she said. Lagarde added that "Japan has a longstanding record of helping others, and of supporting the IMF in its core mission of helping to support economic stability in all its member countries." Earlier this year, the Washington-based fund said it would likely need an additional $500.0 billion to help European countries strengthen their defences against the crisis, but Lagarde has recently said the figure may now be lower. A strong yen and sinking demand in key European markets have dented Japan's export-oriented economy, with Tokyo a regular buyer of debt issued by the European Financial Stability Facility bailout fund since last year. Japan has been talking with other members of the IMF such as China and European nations to finalise their contributions. Tokyo, the second-biggest IMF stakeholder after the United States, has welcomed a recent decision by eurozone finance ministers to temporarily increase their bailout funds to 700 billion euros ($917 billion) from 500 billion. The move was aimed at preventing contagion from the fiscal problems in Greece, Ireland and Portugal spreading to bigger members including Italy and Spain. Madrid in Monday saw the yields on its benchmark 10-year bonds jump above six percent for the first time since late last year as dealers grow concerned it will have trouble closing its huge public deficit. On Tuesday, Azumi also said he did not think Europe has done enough to tackle its financial crisis, but he has previously credited the European Central Bank for its moves to tackle the issue. The ECB has chopped eurozone borrowing costs to an all-time low of 1.0 percent and embarked on a hotly contested programme of buying up the bonds of debt-mired countries. In two so-called long-term refinancing operations in December and February, it pumped more than 1.0 trillion euros into the banking system in a bid to avert a credit squeeze in the 17 countries that share the euro.