Japan to buy ASEAN Bonds to Foster Growth

To demonstrate its support for the Association of Southeast Asian Nations, Japan will pursue a proposed financial framework that uses its foreign-currency reserves to purchase government bonds issued by ASEAN members.

The cooperation will be announced May 3 in India at the first-ever meeting of Japanese and ASEAN finance ministers and central bankers. Finance Minister Taro Aso and Bank of Japan Governor Haruhiko Kuroda will represent Japan at the gathering, which will be held on the sidelines of the Asian Development Bank’s 2013 annual meeting.

Japan aims to foster ASEAN growth by supplying funds to Asian bond markets, which are far less liquid than those in developed countries. Under the proposed arrangement, Japan would acquire holdings in listed mutual funds that invest in Asian government bonds, a move aimed at promoting the stable funding of ASEAN members.

At the same time, Japan will ink or expand bilateral swap agreements for dollars with Thailand, Malaysia, Singapore, Indonesia and the Philippines.

via Nikkei

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza