China and Japan to begin direct currency trading

China and Japan have agreed to start direct trading of their currencies from Friday as Beijing moves toward making the yuan more of a global currency.

Until now, China has only allowed direct trading between the yuan and the US dollar, under tight limits that have been loosened only gradually.

The People’s Bank of China said today that it had authorised the move to help improve the foreign exchange market, promote Sino-Japanese cooperation and develop China’s capital markets.