Japan proposes expanding bilateral FX swap scheme with ASEAN

Light is cast on a Japanese 10,000 yen note as it's reflected in a plastic board in Tokyo, in this February 28, 2013 picture illustration. REUTERS/Shohei Miyano/Illustration/File Photo

YOKOHAMA, Japan (Reuters) - Japan’s Ministry of Finance on Friday proposed launching bilateral foreign exchange swap arrangements of up to 40 billion dollars with Southeast Asian nations to enable Tokyo to provide yen funds to these countries during times of financial crisis.

The proposal was made during a meeting between finance ministers and central bank governors from Japan and the members of Association of Southeast Asian Nations (ASEAN) in Japan, the ministry said in a statement.

The move is aimed at making yen funds more accessible to Japanese firms increasing their presence in Southeast Asia as well as others in need of the Japanese currency in case of financial stress.

The scheme would allow each country to choose either the yen or the dollar in receiving funds under the bilateral arrangements in response to liquidity crisis.

Separately on Friday, Japan entered into bilateral currency swap arrangement worth 3 billion dollars with Thailand and agreed to enter a similar arrangement with Malaysia under a current swap framework.

Reporting by Tetsushi Kajimoto; Editing by Sam Holmes