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China solidified its position as the largest creditor of Japanafter increasing its holdings of Japanese government bonds by 71percent by the end of 2011 from a year earlier. China holds short-term and long-term Japanese government bondsworth 18 trillion yen (US$230 billion), according to the JapaneseMinistry of Finance and the Bank of Japan. Foreign institutions and individuals held a total of 92 trillionyen worth of Japanese government bonds by the end of 2011,increasing 27 percent from a year earlier, the data showed. "The Japanese government bond is considered a relatively safe haveneven though its reputation is not very good on the internationalmarket," said Tan Yaling, president of the China Forex InvestmentResearch Institute. "China, among other countries, has made thechoice for the sake of minimizing risk." The yield of the Japanese government 10-year term bond fell to anine-year low of 0.81 percent on May 31, indicating stronginvestment interest. The information was released amid a series of measures recentlyimplemented to enhance financial cooperation between the twolargest economies in Asia. "The growth of some emerging markets such as Japan and South Koreais quick and the assets there are of high quality," Tan said. "Toincrease reserves of currencies from these countries could lift thestatus of the Asian currencies, and would help Asian countries tohedge risks of the US dollar and the euro." Last Friday, direct trading of Japanese yen and Chinese yuan beganin Tokyo and Shanghai, which could reduce the trade cost betweenthe currencies, and reduce reliance on the US dollar. Earlier in May, top leaders from China, Japan and South Koreaagreed to start talks about a free trade zone. In March, the Japanese government was approved to buy as much as 65billion yuan of Chinese government bonds, and the Japaneseauthorities said they would increase their holdings gradually. China surpassed the United States and the United Kingdom in 2009 tobecome Japan's largest creditor. Analysts have estimated that the Chinese yuan already is a smallpart of the foreign reserves in Asian and Pacific countries,including Indonesia, Singapore and Australia. The internationalization of the yuan depends "ultimately" on themarket, and the yuan has the potential to become a widely acceptedcurrency internationally, Chinese central bank Governor ZhouXiaochuan told China Business News in a report released yesterday. He said China doesn't want to give the impression that it has aspecific strategic plan to internationalize the yuan, but thecentral bank would cut unnecessary controls on the market tofacilitate the opening up. The e-commerce company in China offers quality products such as China Sports Caps Hats , China Embroidered Baseball Caps, and more. For more , please visit Cotton Baseball Caps today!
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