Japan, China Cut Currency Deal, Shun Dollar

Japanese Prime Minister Yoshihiko Noda met with Chinese President Hu Jintao in Beijing today, and emerged with a number of deals—including one that will marginalize the US dollar in Asia. The countries agreed to promote direct yuan-yen trades, the Wall Street Journal reports; until now, the money has usually been converted to dollars first. Japan will also hold yuan in its typically dollar-dominated foreign-exchange reserves.

Japan “seems to be acknowledging implicitly that there will be a single dominant Asian currency in the future,” says one economic historian, “and it won’t be the yen.” The leaders also reached agreements on energy conservation and environmental protection, CNN notes. And they discussed North Korea, emerging with a joint statement promising “concerted efforts to realize peace and stability in the Korean peninsula." (More Yoshihiko Noda stories.)