CS Monitor on $1 trillion in Japanese financial reserves and why they may not be used to bailout the system this time. I think that Japan ought to be less conservative than the current stance but being the 2nd largest open wallet when it’s not clear how stable Japan is itself is not the right stance either.

Tokyo – Can Japan, the world’s second largest economy, save the global financial system?
Don’t count on it.
As world leaders prepare to meet in Washington Saturday to seek a way out of the financial crisis, some are casting covetous eyes in the direction of Japan’s $1 trillion worth of foreign reserves as a source of salvation for troubled nations and banks.
In Tokyo, too, a group of parliamentarians from the ruling Liberal Democratic Party (LDP) are pressing the government to spend some of its reserves – the second largest in the world – to win international prestige and diplomatic influence.
They are likely to be disappointed. The Japanese authorities say that while they are willing to lend some money to the International Monetary Fund (IMF), they would be happier offering advice born of their own financial crisis a decade ago than a lot of cold cash to today’s victims.
And though Japan’s financial system is weathering the crisis better than many other rich countries, a property slump and falling exports are likely to throw the economy – already heavily burdened by debt – into a recession, denting Tokyo’s ability to lead the world out of the current turmoil.

Japan’s $1 trillion to the rescue?