Japan to buy euro debt, Portugal resists bailout

(Reuters) - Japan promised on Tuesday to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis.

Portugal, the latest euro zone member in the market's firing line, continued to fend off pressure to seek an EU-IMF bailout. Prime Minister Jose Socrates said his country had beaten its goal for reducing the 2010 budget deficit and did not need outside help.

Lisbon faces a crucial test on Wednesday of its ability to fund itself on the market at affordable rates after Greece, which sought a financial rescue last May, cleared its first funding hurdle of 2011, selling six-month money on Tuesday at just under the rate of its bailout loans.

"The Portuguese government and Portugal will not ask for any aid or financial assistance for the simple reason that it is not necessary," Socrates told a hastily convened news conference.

But a Portuguese central bank board member, Teodora Cardoso, earlier broke ranks with political leaders, saying Lisbon would do better to seek international financing.

"It would be easier if we had foreign help because this would mean that the adjustment would not be so abrupt, but if we do it alone, for the markets to believe in it, it has to be brutal," Cardoso said according to news agency Lusa.

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