Japan, China start currency trading

Japan and China launched direct currency trading Friday, avoiding use of the dollar as an intermediary currency, dpa reported. The yuan traded at 12.33 yen at the start of the direct currency trading in Tokyo. The direct currency trading was designed to boost trade and investment between the two biggest economies in Asia, reduce transaction costs for companies and mitigate foreign-exchange risks for financial institutions, the Japanese government said. The move came after Japanese Prime Minister Yoshihiko Noda and Chinese Premier Wen Jiabao agreed in December to enhance bilateral financial cooperation. 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. The agency said direct currency exchange would save the two nations some 3 billion dollars annually.