Source: CRI

02-28-2008 17:34

Finance Minister Sadakazu Tanigaki told reporters that Japan welcomed the revaluation, saying the move "not only contributes to the stable development of China's economy, but also has merit in terms of boosting Japan's economy."

"Looking from the perspective of Asia's currency system, I would say it was a historic step," he said.

China announced Thursday the yuan's trading rate with the US dollar will rise by 2 percent, and the yuan to the dollar pegging system is switched to a basket of foreign currencies.

"It was a big decision... and it was a major change," Tanigaki said. "We must closely monitor how the dollar-pegged system will transform into the currency basket system."

Heizo Takenaka, minister for economic and fiscal policy, also said the severance of the yuan's decade-old pegging to the dollar "will be described in history as a very big step" toward ensuring China's greater contribution to the world economy.

"People talk about 2 percent. But the essence of this reform is that (China) has shifted to a basket-style managed floating system," he said.

Hiroshi Okuda, chairman of Nippon Keidanren -- a major economic organization, said the Chinese government's decision marked a further step for China's economy toward the international stage, and should be appreciated.

At 5 pm, the dollar was quoted at 110.83-85 yen in Tokyo, dropping from 112.36-39 on Thursday.

In the Tokyo stock market, the 225-issue Nikkei Stock Average fell 91.68 points, or 0.78 percent, to 11,695.05, the lowest close since July 13, when it ended at 11,659.84.

The broader Tokyo Stock Price Index of all First Section issueson the Tokyo Stock Exchange slid 8.00 points, or 0.67 percent, to 1,186.76, also the lowest finish since July 13, when it ended at 1,185.70.

The decline mainly derived from the selling of automakers and other export-driven shares after the revaluation drove the yen sharply higher against the dollar, prompting fears that Japanese exporters' earnings may be trimmed in the coming months..

However, analysts and economists said the yuan's revaluation was more moderate than previously expected. Therefore, it will have limited effect on Japan's economy.

Chief Cabinet Secretary Hiroyuki Hosoda also said the Japanese government sees no major impact on the country's economy just because of the yuan's appreciation.

Likely, Toyota Motor Corp. Vice Chairman Fujio Cho denied there will be any serious effect, while saying it is worth paying further attention to the yuan's move.

2005-7-22

 

Editor:Xiong Qu