“I wouldn’t be surprised that before the end of this teleconference you would see something on the market,” Trichet told reporters in Frankfurt today after the ECB kept its benchmark interest rate at 1.5 percent. “We were not unanimous but with overwhelming majority with regards to the bond purchases.”

The ECB, which ceased buying the bonds of distressed euro- area governments 18 weeks ago, was under pressure to re-enter markets after Italian and Spanish yields soared to euro-era records. European officials are trying to put a firewall around Italy and Spain on concern they will have to follow Greece, Ireland and Portugal in seeking bailouts.

Today’s move is “a welcome re-activation of the Securities Markets Program after a dormant period,” said Ken Wattret, chief euro-area economist at BNP Paribas SA in London. “It would be even more welcome if buying was across a broader range of markets.”

Italian and Spanish 10-year bonds declined, pushing the yields to 6.15 percent and 6.25 percent respectively. Irish and Portuguese bond rose as people with knowledge of today’s transactions said the ECB bought those securities, pushing the yields on their debt to 10.06 percent and 10.62, respectively.

Government Plan

The euro slipped after Trichet’s comments, falling to $1.4139 at 4:09 p.m. in Frankfurt from $1.4202 at the start of the press conference.

While European leaders last month agreed on a second bailout package for Greece that includes voluntary contributions from private-sector bondholders and widens the scope of the European rescue fund, investors aren’t convinced the measures will stop the 21-month crisis from spreading.

Governments must still ratify the plan, which would empower the European Financial Stability Facility to start buying debt on the secondary market. The EFSF “should be operational in our view as soon as possible,” Trichet said. Earlier, European Commission President Jose Barroso sought more firepower for the euro region’s 440 billion euro rescue fund.

Trichet also indicated the ECB is reluctant to shelve further rate increases even as investors reduce bets on the central bank adding to its two rate moves in 2011.

Bank Bond Sales

While acknowledging a “particularly high” level of uncertainty, ECB rates are still “accommodative” and inflation risks “remain on the upside,” Trichet said. The Bank of England kept its key rate at 0.5 percent today.

The ECB will lend euro-area banks as much money as they need for six months and extend its existing liquidity measures through the end of the year, he said.

Morgan Stanley analysts said yesterday that southern European bank bond sales have been “very thin” for the past two months and short-term money markets are closed to some banks looking for funding for longer than 30 days.

We “are increasingly concerned that funding markets won’t re-open with sufficient depth or at good enough terms for Italian and Spanish issuers,” the analysts said.

Europe’s debt crisis and concerns about slowing U.S. growth are starting to hurt other economies as investors seek havens, driving up their exchange rates and undermining exports.

Japan today sold yen to halt an appreciation that saw it approaching a postwar high against the dollar. Turkey’s central bank also reduced its benchmark rate to a record low of 5.75 percent to shield its economy. Yesterday, the Swiss central bank unexpectedly cut interest rates and said it will take steps to stem the franc’s record-breaking gains against the euro and the dollar.

Trichet said a strong dollar is “good for the U.S. and the rest of the world.”