Guest fountainhall Posted December 26, 2011 Share Posted December 26, 2011 In a further sign that China wants to create a more global role for its currency, it plans to sign an agreement with Japan to make their currencies directly convertible with each other. Up till now, each has had to undertake a double conversion by buying US$ first. "Given the huge size of the trade volume between Asia's two biggest economies, this agreement is much more significant than any other pacts China has signed with other nations," Ren Xianfang of IHS Global Insight was quoted as saying by the Bloomberg news agency . . . The plans were announced during a visit to China by Japan's Prime Minister Yoshihiko Noda and after a meeting with Chinese Premier Wen Jiabao. The two leaders also agreed to allow the Japan Bank for International Cooperation to issue yuan-denominated bonds in China, the first time a foreign government body has been allowed to do so. At the same time, Japan said it was also looking to buy Chinese government bonds, a move that analysts believe may prove to be mutually beneficial to both nations . . . "By adopting Chinese bonds as a part of official foreign exchange reserves, Japan is labelling Chinese bonds as an investable asset," according to Takuji Okubo of Societe Generale Tokyo . . . The deal "is a manifest of a higher level of commitment from China to the open-up reform, which would add credibility to the ongoing offshore yuan experiment", he said. Along with promoting bilateral business ties, China and Japan said they had also made progress on a free trade agreement between China, Japan and South Korea. The proposed agreement is expected to boost trade between the three nations. http://www.bbc.co.uk/news/business-16330574 More countries including Thailand are doing deals with China to facilitate trade and take advantage of the anticipated rise in the Chinese currency. China also announced a 70 billion yuan ($11 billion) currency swap agreement with Thailand last week as part of a plan outlined in October to promote the use of the yuan in the Association of Southeast Asia Nations and establish free trade zones. Central banks from Thailand to Nigeria plan to start buying yuan assets as slowing global growth has capped interest rates in the U.S. and Europe. http://www.bloomberg.com/news/2011-12-25/china-japan-to-promote-direct-trading-of-currencies-to-cut-company-costs.html The Yuan has been the best performing currency in Asia in 2011 after the ¥. Quote Link to comment Share on other sites More sharing options...
