China's surprise currency deal with Japan does little to chip away at the dollar's reign as reserve currency, but it could foreshadow an era when the yuan has more global influence.
The two countries announced Sunday that they would start direct trading their currencies, instead of using the dollar as intermediary. The move is part of a financial agreement between the two countries following meetings between Japanese Prime Minister Yoshiko Noda and Chinese President Hu Jintao.
China is Japan's biggest trade partner with annual two-way trade of close to $350 billion, and as part of the agreement Japan will also apply to buy Chinese bonds next year. (CNBC)
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