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RMB adoption between China and Japan has more than doubled in the last two years

RMB adoption between China and Japan has more than doubled in the last two years

1 December 2015 | 4 min read

SWIFT's RMB Tracker shows that the Chinese currency is now the second most active currency for payments between Japan and China/Hong Kong.

Brussels, 1 December 2015 - According to SWIFT's latest RMB tracker, the Chinese currency is now the second most active currency between Japan and China/Hong Kong with the RMB accounting for 7% of payments, by value, compared to 3% two years ago.

Although the Japanese yen retains its top position as the number one currency used for payments between Japan and China/Hong Kong, the RMB is gaining traction in this corridor. In the last two years, the RMB has jumped from position four to position two, overtaking the Hong Kong dollar and the US dollar. SWIFT data points to institutional transfers as the driving force behind RMB adoption, representing 97% of the total payments value between Japan and China/Hong Kong in October 2015.

"As China is one of Japan's biggest trading partners, we have been monitoring the use of the Chinese currency in Japan for a while," says Yuji Takei, Head of Japan at SWIFT. "In June 2015, a Japanese bank issued Japan's first yuan bond and other Japanese companies are expected to follow that lead. This shows increased confidence in the RMB, which could lead to further expansion of trade and investment between China and Japan using the RMB."

In October 2015, the RMB held its position as the fifth most active currency for global payments by value and accounted for 1.92% of global payments. RMB payments value decreased by 23.53% compared to September 2015, whilst in general all payments currencies decreased by only 2.42%. This month's significant decrease may be related to seasonal effects like the Golden Week holiday in China.

RMB Graph Dec 2015
RMB Graph Dec 2015

About SWIFT and RMB Internationalisation
Since 2010, SWIFT has actively supported its customers and the financial industry regarding RMB internationalisation through various publications and reports. Through its Business Intelligence Solutions team, SWIFT publishes key adoption statistics in the RMB Tracker, insights on the implications of RMB internationalisation, perspectives on RMB clearing and offshore clearing guidelines, supports bank's commercial RMB product launches and provides in-depth analysis and business intelligence, as well as engaging with offshore clearing centres and the Chinese financial community to support the further internationalisation of the RMB.

The SWIFT network fully supports global RMB transactions, and its messaging services enable Chinese character transportation via Chinese Commercial Code (CCC) in FIN or via Chinese characters in MX (ISO 20022 messages). It offers a suite of dedicated RMB business intelligence products and services to support financial institutions and corporates. In addition, SWIFT collaborates with the community to publish the Offshore and Cross-Border RMB Best Practice Guidelines, which facilitate standardised RMB back office operations.

Please click here for more information about RMB Internationalisation or join our new ‘Business Intelligence Transaction Banking' LinkedIn group.

SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,800 banking organisations, securities institutions and corporate customers in over 200 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

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This report is provided for information only. If the customer or any third party decides to take any course of action or omission based on this report and/or any conclusion contained therein, they shall do so at their own risk and SWIFT shall not be liable for any loss or damage, arising from their acts or omissions based on this report and/or any recommendations contained therein.