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raising the US debt ceiling to avoid a default.
Japanese chief cabinet secretary Yukio Edano told a news conference that he expected it to help bring stability to roiled markets.
“Japan welcomes the announcement that an agreement was made to avoid default. We expect the deal will lead to the stabilisation of markets,” chief cabinet secretary Yukio Edano said at a news conference.
Finance Minister Yoshihiko Noda said he was “glad to see the last-minute development”.
Japan is the second-largest holder of US Treasurys after China.
Tokyo stocks were 1,84 percent higher by noon yesterday, after the dollar strengthened against the yen on news of the agreement.
Concerns over the protracted debt negotiations had sent the greenback close to post-War lows against the safe haven yen, with risk-averse investors embracing the Japanese unit to the detriment of exporters whose repatriated earnings are eroded by a strong domestic currency.
The likes of Panasonic, Sharp, Toshiba
and Hitachi saw profits tumble in the fiscal first quarter due in part to the strength of the yen.
French Finance Minister Francois Baroin welcomed yesterday a deal reached overnight to increase the US debt ceiling and avoid a potentially catastrophic default.
“Everything that has been put into place in the past two or three weeks – the eurozone agreement on Greece, the deal in Washington on the US debt – move in the right direction . . . of reinforcing global growth,” Baroin said on France Inter radio.
The failure to reach a deal and a default on
its debt by the United States would have
considerable consequences for the global economy which is still recovering, warned Baroin. – AFP.