English | دری

China and Japan to start direct yen-yuan trade in June

in International Business

China and Japan to start direct yen-yuan trade in June

China will allow direct trading of the yuan and the Japanese yen, in a move aimed at promoting trade between Asia’s two biggest economies.

This means the two countries will not be using the US dollar as an intermediary.

China, which sometimes has a tense relationship with Japan, is the country’s biggest trading partner.

China’s central bank said the China Foreign Exchange Trade system would launch this trade, starting next month.

“This is part of China’s broader strategy to reduce dependence on the dollar,” said Dariusz Kowalczyk from Credit Agricole CIB in Hong Kong.

He added that the yen was chosen because of the large amount of trade between the two countries and that “this could lead to an expansion of trading with other currencies”.

In December, the leaders of Japan and China agreed to mutually promote direct trading between the two currencies based on market principles.

The People’s Bank of China said the move would help lower currency conversion costs and help facilitate bilateral trade and investment.

Japanese Finance Minister Jun Azumi told reporters that trading under a new regime will start in Tokyo and Shanghai on 1 June, according to Reuters News agency.

“By conducting transactions without using the third country’s currency, it will bring merits of reducing transaction costs and lowering risks involved in settlements at financial institutions,” said Mr Azumi.

“That will contribute to improve convenience of the both countries’ currencies and reinvigorate the Tokyo market.”

Japanese media are reporting that this is the first time China has let a major currency other than the US dollar trade directly with the yuan.

Source: BBC


Tags assigned to this article:
China-Japan direct tradeyen-yuan trade

Related Articles

The European Cigarette Industry Is Getting Slammed By The Euro Crisis

Conventional wisdom would suggest that smoking is a business that’s immune to economic downturns.  Some might argue that smoking might

Micron Technology Buys Japanese Rival Elpida

Micron agrees a USD 2.5 billion deal to buy Japanese chipmaker Elpida, which will consequently make Micron become the world’s

UK phases out financial aid to India by 2015

UK’s international development secretary Justine Greening has said that UK’s financial aid of about USD 320mn to India will be

No comments

Write a comment
No Comments Yet! You can be first to comment this post!

Write a Comment

Your e-mail address will not be published.
Required fields are marked*

Time limit is exhausted. Please reload the CAPTCHA.