Yuan-denominated payment between China and Japan doubles: SWIFT

BEIJING - The Chinese yuan has been increasingly used in cross-border payments between China and Japan, underscoring the currency's growing acceptance in cross-border transactions, according to SWIFT.

The Chinese currency's share in all payments between Japan and Chinese mainland and Hong Kong doubled from a year ago to 7 percent in October, making yuan the second most active currency in cross-border payment between the two countries, SWIFT said in its monthly report tracking cross-border yuan payment.

The Japanese yen remains the most favorable choice in payments between the two countries, SWIFT said.

Globally, yuan retained its position as the fifth most used currency in global payments in October after the Japanese yen, the British pound, the euro and the US dollar, accounting for nearly 2 percent of the world's total.

The month has also seen China launching the much anticipated cross-border payment infrastructure Cross-border Interbank Payment System (CIPS), which can clear cross-border yuan payment more efficiently and potentially promote its use globally.

Daphne Huang, SWIFT's head of China, said in a recent interview that it is still early to gauge CIPS's impact on cross-border yuan transactions,but she added the system is a fundamental infrastructure prompting yuan's growing acceptance in global transactions in the long run.

Before the launch of CIPS, cross-border yuan clearing has to be handled by a designated offshore clearing bank or a correspondent bank in China. Such arrangements tend to be costly and time-consuming for offshore customers to use yuan for payment.