Direct currency trade between Japan and China
Another attempt between Japan and China to by-pass the USD and to strenghthen the interests between the two countries
As of June 1 the exchange rates between JPY and CNY will be steadily set to implement direct trading between the two currencird. Therefore as, of next Friday bilateral businesses and trade can be met in the two national currencies and no longer will the USD be tied in between. This should eliminate some additional costs for Japanese exporters.
It is the second time that Chinese authorities allow direct currency trade in a foreign currency. The Bank of China will allow fluctuations between the two currencies up to 3 % whereas the gap for the USD is only around one percent.
Looking to textiles and textile machinery this will allow Japanese exporters on the longer run to offer lower prices than their competitors.