As the financial crisis has unfolded - unleashing appalling damage on markets and destroying investments - Japan has stood on the sidelines, biding its time. That time may be now.

If government sources are being accurate, Japan may be preparing to release some 10 per cent of its reserves to the IMF to help it plug the gaping holes in the global economy as they emerge. It is precisely the sort of gesture that Japan does well: stepping in to a situation in the role of "ATM to the world".

But behind the scenes, there is a good deal of politics behind the impressive financial show of strength. Japan is using this message to send several messages, and by announcing the plan at the G20 meeting in Washington, will ensure that those messages are heard loud and clear.

The first message is that Japan is not being purely opportunist in the global crisis. Its banks may have swooped hungrily on distressed Wall Street assets - notably Lehman and Morgan Stanley - and its corporations have been quick to unleash their cash on other grossly undervalued assets around the world: but the government, at least is keen to look like a giver, rather than a taker.

The second message is to other foreign reserve-rich nations around the world. Japan, unlike China, Singapore and many Middle Eastern oil producers, has not diverted large portions of its reserves into an actively managed Sovereign Wealth Fund, but has nearly $1 trillion waiting for useful deployment. Japan's message is simple - Sovereign Wealth Funds cannot be "pure" players on behalf of their governments because of their need to secure returns. Tapping the reserves is a clear demonstration of state support for the international financial system, and one which it hopes others will follow.

Finally, Japan's gesture in its early form sends a message of support for the concept of the IMF itself. But that may quickly change: recent weeks have seen a whole series of alternative ideas thrown around, and there has even been suggestion that Friday's meeting in Washington will produce proposals for an "Asia-only IMF".

Japan is clearly not prepared to step forward yet to provide political leadership in Asia, and has so far been reluctant to see the region attempt to break off from the Western world. a

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