The currency deal that moves China and Japan closer together

Chinese and Japanese currencies began direct trading in June 2012 (photo:dpa)
Chinese and Japanese currencies began direct trading in June 2012 (photo:dpa)

As the West waits anxiously on every move and meeting related to the euro, China and Japan are moving ahead with a mutually beneficial bilateral currency deal of their own which will increase trade between the two countries. In the first of a series on the emergence of a new order in the geopolitical landscape of East Asia, we look at why the move could raise the status of the renminbi and the yen on the international stage.

CHINA and Japan welcomed the euro when it was launched in 1999. Both held large amounts of foreign exchange reserves, mostly in dollars, and were looking to diversify their holdings by building up significant positions in the euro.

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