Japan, China to Help Eurozone Through IMF

Japanese Finance Minister Jun Azumi met with Chinese Vice Premier Wang Qishan in Beijing on Sunday to discuss funding support to the eurozone through the International Monetary Fund.

The IMF said last month it may need to increase lending by 600 billion dollars to counter the effects of the eurozone sovereign debt crisis. It was planning to seek financial help from the U.S., Japan and China to boost its lending capacity.

American officials have indicated the U.S. isn’t prepared to boost its commitments to the Washington-based lender.

The leaders of Japan and China said after the meeting yesterday that their nations are prepared to support the IMF’s important role in addressing the European sovereign debt crisis, on the basis of further efforts by the EU and euro area members and in cooperation with G-20 and IMF members.

“We agreed that Japan and China will coordinate closely and will jointly respond to the IMF,” said Mr Azumi. He mentioned that the two countries had not discussed the amount of any funding support through the IMF yet.

Showing China and Japan are united to support the debt crisis is positive news. However, as some experts said, it may still take some time for the two countries to decide specifics as eurozone hasn’t yet reached agreement on a solution within the region.

The euro advanced today ahead of a meeting of European finance ministers in Brussels aimed to achieve the final resolution of the Greek bailout.

Source: Bloomberg

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Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.