Japan said Tuesday that it might use its euro zone reserves to purchase joint euro bonds issued to support Ireland. The news bolstered the euro on trading platform EBS, but then early European trading saw the joint currency drop back to Monday’s levels.

A Reuters report said that Japan might be acting for two reasons. The first is to support the euro zone in a quest to preserve its own recovery, since rising debt panic in Europe could threaten that. The second is to increase its position in global economic diplomacy, something that has been somewhat eclipsed by China’s actions in the purchase of Spanish and Greek debt.

Yoshihiko Noda, Japan’s finance minister, said in the report that his country might use its reserves to buy approximately 20% of the bonds, to be rated AAA, that the euro zone will issue jointly to raise money for Ireland’s bailout. He said, “I think it's appropriate for Japan to purchase a certain amount of bonds to boost confidence in the European Financial Stability Facility (EFSF) and make a contribution as a major country.”

China has already made a commitment to purchase Spanish debt, although Yu Yongding, a senior adviser to China's central bank and an influential economist in the government think tank Chinese Academy of Social Sciences, said that his country should also confine itself to AAA-rated investments.

“In principle we support the euro, but we also need to ensure that our investment is safe and generates returns,” he said, adding, “I think it's much safer if we buy the fund as it has a triple-A rating.

Unofficial estimates put the amount already held by China in outstanding euro zone public debt as around 8.8 billion euros ($11.407 billion). Most of those holdings are through sovereign wealth funds and State Administration of Foreign Exchange (SAFE) funds.