China and Japan begin trading yen for yuan

[pampango]

2. I didn't know China and Japan had struck a "wider deal" last year.

"The yuan-yen trade - part of a wider deal reached last year to forge closer ties between Asia's two largest economies - will be allowed to move in a wider range than the narrow band at which the US dollar and yuan change hands."

This BBC story was filed on Christmas day last year.

http://www.bbc.co.uk/news/business-16330574

China and Japan plan direct currency exchange agreement

"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. The deal will allow firms to convert the Chinese and Japanese currencies directly into each other.

Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs. It is the latest step by China as it seeks a more global role for the yuan.

"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," Ren Xianfang of IHS Global Insight was quoted as saying by the Bloomberg news agency. China is Japan's biggest trading partner."

Tripartite agreement?

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. The proposed agreement is expected to boost trade between the three nations.