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“To me, there looks like some sort of tacit global agreement for nations outside of the euro zone to assist in the refunding of nations within the euro zone,” said Andrew Busch, global currency and public policy strategist with Bank of Montreal’s investment arm in Chicago. “Without question. there’s a lot of discussion about this.”

Japan, China to support euro zone by ERIC REGULY AND BRIAN MILNER

Japan and China have emerged as defenders of the euro zone, pledging to support its bonds and prop up the embattled monetary union at a crucial moment in its debt crisis.

The support is key as it signals to global investors that there is international backing for Europe’s efforts. The timing is also key as markets, already speculating that Portugal is next for a bailout, begin to shift their focus to Spain’s far bigger and more important economy. Spain, if it were to succumb, would mark the spread of the crisis to Europe’s larger economies. So far, its smaller members have been the focus.

In Tokyo Tuesday, Japan’s Finance Minister Yoshikiko Noda said Japan would buy more than 20 per cent of new euro zone bonds issued to support Ireland’s €85-billion ($110-billion) bailout, which is being financed by the European Union and the International Monetary Fund. These will not be the bonds of individual governments, but rather those from the European Financial Stability Facility, or EFSF, the group’s rescue fund.

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