Japan to buy euro rescue bonds

Japan pledged Tuesday to support Europe's bailout efforts by buying a major portion of the European bonds being auctioned this month to finance emergency loans to Ireland.

Finance Minister Yoshihiko Noda said his government may buy one-fifth of the bonds being issued this month by the European Financial Stability Facility.

The European Union created the facility in May as a last-resort fund for countries that use the euro common currency as it scrambled to save Greece from national bankruptcy.

In November, Ireland became the second euro member to require an international bailout amid crippling debts at Dublin banks.

Noda's pledge helped to lift markets, which have been rattled in recent weeks by rising fears that Portugal soon could be forced to join Ireland and Greece in seeking an international bailout.

Portugal, which plans a major bond auction Wednesday, recently lobbied for financial support from China. The Chinese have alreadytapped their foreign currency reserves to buy Greek and Spanish debt securities.

Analysts said Japan and China, which both have large cash reserves, are likely interested inthe higher yields in Europe as well as stabilizing world markets among key trade partners.

China, which has been criticized internationally for keeping its own currency low to gain trade advantages, may even be trying to garner political goodwill.

"The fact that China has said they have been participating and supporting the market for the Greek bonds and the Portuguese bonds shows that China also is taking more of a global leadership role," said Norman Raschkowan, North American strategist at Mackenzie Financial Corp.

Prime Minister Jose Socrates said againTuesday thatPortugal doesn't need a bailout.

But reports have said Germany and France are pushing Lisbon to accept assistance to keep the debt crisis from spreading to bigger countries such as Spain that would be much costlier to rescue.

Analysts estimate Portugal would require a bailout of$65 billion to $130 billion US.