Bank of Japan pledges foreign currency support (by Chris Oliver)

HONG KONG (MarketWatch) -- The Bank of Japan announced Friday it was prepared to provide its foreign currency assets to help shore up capital markets during emergencies to help contain the risk of global contagion. "Time may be necessary before international organizations and other relevant institutions are able to take necessary measures," the BOJ said in a statement posted on its website. It said it was prepared to "provide foreign currency" as needed until international support was available to help stabilize situations, noting that volatility had risen since the global financial crisis. The BOJ will also make its foreign currency assets available in situations where Japanese financial institutions encounter "serious trouble in foreign currency settlements and are unable to resolve the situation by themselves", the central bank said. It said it would hold its foreign currency assets with foreign central banks in the U.S. and major European countries, with a preference for government securities with "a high degree of liquidity and creditworthiness."