(1 June 2012 – China) China announced that as of today (Friday) the direct trading of the yuan against the Japanese yen will begin.It is a key step towards making the yuan or renminbi a truly global currency, it marks the first time China has allowed a major currency other than the United States dollar to be traded directly against the yuan.
The move is expected to boost trade between the two leading Asian economies in the wake of the Eurozone’s economic downturn. More important, it will promote greater internationalisation of the yuan.
Analysts said a direct yuan-yen exchange rate will help business firms mitigate risks brought by a fluctuating US dollar and reduce exchange losses for Chinese and Japanese companies.
The People’s Bank of China (PBOC) said that as part of the efforts between China and Japan to strengthen cooperation in developing the financial market, the move is as an important means of promoting direct yuan-yen trading.
Direct yuan-yen trading shows the important role of the offshore RMB market in Japan. Analysts expect the system to be expanded to more currencies, including the Euro and British pound.