Yen-yuan direct trading to begin on Friday
Beijing - China and Japan have agreed to begin direct-trading of their currencies from Friday, avoiding use of the dollar as an intermediary currency, the two governments said.
The direct currency trading was designed to promote bilateraltrade, facilitate the use of the yuan and the yen in international trade settlement, and lower the cost of currency conversion, the China Foreign Exchange Trade System said Tuesday.
The People's Bank of China, China's central bank, said it would support the "important step in strengthening cooperation between China and Japan in developing financial markets." The move followed an agreement to strengthen financial cooperation by Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda in December.
China is Japan's largest trading partner with bilateral trade valued at 345 billion dollars last year.
An estimated 60 per cent of trade between China and Japan is settled in US dollars, China's official Xinhua news agency said.
Using the dollar as an intermediary, the yuan can be tradeda gainst the currencies of Japan, the European Union, Britain, HongKong, Malaysia, Russia, Australia and Canada, the agency said.
