China can buy Japanese Yen to hedge against weakening Dollar.
Chinese Yuan is pegged to Dollar. So China cannot control it’s monetrary policy via putting internal reserves outside.
In this process Japanese Yen become strong. But Japan cannot do anything with it’s enormous USD reserve.
What’s next? unless China appreciate its currency?
What will be the next equilibruim?
Japanese primie minister pressures Beijing on Yen. but How much?
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