Japan has bought €120 million of new six-month bills sold by the euro zone's rescue fund, the European Financial Stability Facility (EFSF), in an auction today, a finance ministry official said.
The amount accounts for 8 per cent of a €1.5 billion of six month bills sold by the EFSF in the auction which drew total bids worth €4.66 billion.
The yield on the European Financial Stability Facility bond due 2016 rose seven basis points to 2.14 per cent following today's auction.
The auction came a day after US ratings agency Standard & Poor's downgraded the EFSF by one notch to AA+ from AAA, following downgrades of the ratings of France and Austria by the same margin and rating cuts of seven other euro zone nations.
Japan, a major buyer of EFSF bonds, said they remained an attractive investment, with its finance minister voicing the intention to continue to buy such bonds despite the downgrade.
Japan has so far bought €3.655 billion of EFSF bonds of a total €22.5 billion of such bonds sold by the Luxembourg-based fund, set up in May 2010.
Japanese officials have said they would buy EFSF bonds by tapping liquid euro assets in its foreign reserves providing that Europe makes efforts to resolve the region's debt crisis.
Reuters
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