UPDATE 3-Japan's Ibuki: US bailout good for world economy

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TOKYO, Sept 8 (Reuters) - Japanese Finance Minister Bunmei Ibuki said on Monday he welcomed the U.S. government takeover of mortgage giants Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) and it would be positive for the global economy.

Ibuki said the U.S. move was also good for Japanese financial institutions although they did not hold so many bonds issued by the U.S. government-sponsored enterprises that their overall business would be affected.

"I think it will have a positive impact on the world economy as it eases worries over the U.S. economy through more stable financial markets in the United States," Ibuki told reporters.

Japan's three largest banks -- Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz), Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz) and Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) -- together had about 4.7 trillion yen ($43.29 billion) in debt securities from U.S. housing agencies including Fannie Mae and Freddie Mac by the end of March.

As of mid-2007, Japan was the second-biggest U.S. agency bond holder with $229 billion of such debt, behind China's $376 billion, U.S. Treasury data showed. [ID:nN07344487]

Japan's Ministry of Finance, which controls the world's second-largest foreign reserves, does not give breakdowns of how much it holds in U.S. agency bonds.

The U.S. government seized control of the mortgage finance companies on Sunday in a bid to support the U.S. housing market and ward off more global financial market turbulence, in what could be its biggest federal bailout ever.

"Japan welcomes the step as it removes one unstable factor in the United States, especially because the dollar is a key international currency," Ibuki said.

U.S. Treasury Secretary Henry Paulson will phone his Group of Seven counterparts including Ibuki on Monday to explain the details of the U.S. action, Ibuki said.

Holders of Fannie Mae and Freddie Mac's debt are generally expected to do well under Paulson's plan to take over the government-sponsored companies.

Ibuki said he was not directly informed before the official announcement but the bailout plan was explained to his deputy in advance. (Reporting by Yoko Nishikawa; Editing by Hugh Lawson)