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&nbsp;China and Japan have unveiled plans to promote direct exchange of their currencies in a bid to cut costs for companies and boost bilateral trade.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">The deal will allow firms to convert the Chinese and Japanese currencies directly into each other.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs.&nbsp;It is the latest step by China as it seeks a more global role for the yuan.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">&quot;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,&quot; Ren Xianfang of IHS Global Insight was quoted as saying by the Bloomberg news agency.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">China is Japan's biggest trading partner. According to the&nbsp;Japan External Trade Organization, trade between the two countries stood at 26.5tn yen ($339bn; &pound;218bn) in 2010.&nbsp;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.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">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.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">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.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">&quot;By adopting Chinese bonds as a part of official foreign exchange reserves, Japan is labelling Chinese bonds as an investable asset,&quot; according to Takuji Okubo of Societe Generale Tokyo.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">&quot;This should encourage Japanese private investment into Chinese bonds, as well as into other Asian emerging currencies. Such development in turn should help develop offshore currency trading in Japan,&quot; he added.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">As for China, Mr Okubo explained that the move will help China further open up its financial markets.&nbsp;The deal &quot;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&quot;, he said.
<span class="cross-head" style="color: rgb(80, 80, 80); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 16px; display: block; font-weight: bold; margin-top: 0px; margin-right: 0px; margin-bottom: 16px; margin-left: 0px; font-size: 1.231em; text-rendering: optimizelegibility; ">Tripartite agreement?
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">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.&nbsp;The proposed agreement is expected to boost trade between the three nations.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">&quot;On a free-trade agreement among Japan, China and South Korea, we've made a substantial progress for an early start of negotiations,&quot; Mr Noda said.
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">China has been pushing for the three parties to speed up talks and proceedings on the deal, especially after Japan showed a keen interest to participate in the Trans-Pacific Partnership Agreement (TPP).
<p style="color: rgb(51, 51, 51); font-family: Arial, Helmet, Freesans, sans-serif; line-height: 18px; margin-top: 0px; margin-right: 0px; margin-bottom: 18px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; font-size: 1.077em; text-rendering: auto; clear: left; ">The TPP, a trade pact led by the US, includes Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.&nbsp;It is aimed at eliminating tariffs and other barriers to goods and services trade and investment among the member countries to boost growth.