EU foreign policy chief thanks China for support in buying bonds

After investing billions of euros in Portuguese and Greekbonds to diversity Rosetta Stone Software its "huge" foreign exchange reserves awayfrom the dollar, China has said it is considering buying more, in a move to help stabilise the bloc's fragile finances andprotect its business interests. "The EU gratefully acknowledges continued Chineseinvolvement in European sovereign bond markets during the recentand quite turbulent period," Catherine Ashton said in Hungary,in an interview with the English-language China Daily. "Investor confidence is a key condition for macro policy andreforms to succeed in any circumstances and certainly now." Ashton was in Hungary, current holder of the EU's rotatingpresidency, on Thursday for talks with China's State CouncilorDai Bingguo. The European Council President Herman van Rompuy visitsChina on a four-day visit starting on Sunday for talks to boosteconomic and trade ties. The article also cited Ashton as saying that China's"calmness and objectivity had been helpful in avoiding undue andunfounded turbulence and speculation regarding some countries inthe eurozone." "This has been important in helping to underpin confidenceand stabilise markets," she said. Support from China to buy Spanish and Portuguese bonds hasbeen crucial in helping to shore up debt markets in the eurozone periphery as well as the single currency. China is keen Rosetta Stone languages to diversify its currency reserves -- whichrose in the first quarter to $3.05 trillion -- with the euro theprimary alternative to the dollar, which accounts for around twothirds of its holdings. [ID:nTOE70B03C] Buying European debt and flagging an intention to do so canalso help Chinese manufacturers by driving up the value of theeuro, making Chinese products cheaper to buy. China was also in talks to invest in Spain, including in thereorganisation of troubled Spanish savings banks, the Ministryof Foreign Affairs said in April. It is no longer ever issued when scheduled because thattime is always wrong for some reason. ... At this point no oneshould take the report seriously," Scissors said. Altogether, Treasury reviewed the exchange rate practicesof 10 major trading partners in the semi-annual report. Itconcluded none was manipulating their currency to gain anunfair trade advantage or to prevent an effective balance ofpayments adjustment. Japanese bonds in short and medium term maturities arelikely drawing demand from foreigners, supported by expectationsthat the Bank of Japan will keep to its ultra-easy monetarypolicy, analysts said."Foreigners are continuing to buy Japanese bonds despite lowyields on the view that they are possibly more attractive thanother debt such as European bonds Rosetta Stone Hindi which could be weighed down by sovereign debt crises," said Satoshi Igarashi, PortfolioAnalyst at BNP Paribas in Tokyo.

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