Japan's Aso doesn't see major market disruptions on Greece turmoil

[June 29, 2015] By Stanley White

TOKYO (Reuters) - Japanese Finance Minister Taro Aso said on Monday he did not think declines in Japanese stocks would spread or that the yen would suddenly spike due to turmoil triggered by a deepening crisis in cash-strapped Greece.

Aso, speaking to reporters, said that if Greece left the euro zone, the impact on markets could be big, but less so if Athens defaulted and remained in the euro zone.

Japan's Nikkei share average slipped to a one-week low due to rising risks of Greece defaulting on its debts. The yen was stable versus the dollar, but Japanese policy makers are likely to remain on edge as they try to prepare for the impact of what could be a messy resolution to Greece's debt crisis.

"Greece came very close to securing a bailout but problems came up close to the finish line," Aso said.

"Stocks are falling now, but I don't see further declines in stocks or a sudden surge in the yen."

After bailout talks between the leftwing government and foreign lenders broke down at the weekend, the European Central Bank froze vital funding support to Greece's banks, leaving Athens with little choice but to shut down the system to keep its banks from collapsing.

The eurozone's problems risk undermining Japan's economy as a sell-off in Japanese shares could hurt consumer sentiment and wild swings in currencies could disrupt business plans.

Developments in the Greek debt crisis and the Asian financial market reaction so far have yet to alarm the Bank of Japan enough to consider offering emergency liquidity, officials familiar with its thinking say.

Chief cabinet secretary Yoshihide Suga said "We are taking the Greece situation quite seriously and responding firmly."

He played down Monday's fall in the Nikkei stock index to a more than one-week low, saying that after a rapid rise in recent weeks it was only natural for there to be some adjustment.

(Reporting by Stanley White and Elaine Lies,; Editing by Chang-Ran Kim & Richard Borsuk)

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