Friday, October 26, 2018

Long time Japan joins global de-dollarization movement by signing new direct bi-lateral trade agreement with China

Following World War II then West Germany (now unified of course), and Japan became virtual 'vassal states' to the U.S. under the terms of the surrender agreements they signed to end the conflict.  And over the past 70+ years these two nations have for the most part remained solidly in the sphere of American influence.

However with the U.S. now engaging in economic warfare against more than 10% of global economies by turning the dollar and reserve currency into a weapon, both of these long standing allies are now suddenly defying U.S. hegemony by proposing alternative policies that don't include use of the dollar.

And on Oct. 26, Japan took this move one step further by signing an agreement with rival China in a trade pact that would entail direct use of each other's own currencies.

Beijing and Tokyo sealed a multi-billion dollar currency swap arrangement on Friday, aimed at enhancing financial stability and spurring business activity in both countries.
According to the Bank of Japan (BOJ), the arrangement which will last until October 25, 2021, will allow the exchange of local currencies between the two central banks for up to 200 billion yuan or 3.4 trillion yen ($30 billion). 
The agreement was sealed during Japanese Prime Minister Shinzo Abe’s visit to Beijing for the first formal Sino-Japanese summit in seven years. The meeting comes as Asia’s two biggest economies look to strengthen relations against a backdrop of trade friction with the United States. 
The two main holders of the US Treasury securities, China and Japan have trimmed their ownership of notes and bonds in August. 
“With the strengthening of economic and financial linkages between Japan and China, Japanese financial institutions have been expanding their renminbi-based businesses,” said the BOJ. – Russia Today
Despite the fact that China is right now undergoing an economic slowdown that includes liquidity issues within their banks and equity markets, use of the Yuan in international trade settlement continues to increase as more and more countries around the world seek to find alternatives to the dollar and its unipolar reserve currency system.


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