One of Japan's biggest banks today said it would sell bonds denominated in China's yuan currency as frosty ties between the major trading partners show signs of thawing.
Bank of Tokyo-Mitsubishi UFJ, a unit of Mitsubishi UFJ Financial Group, said it would raise 350 million yuan (USD 56 million) through the two-year bond offering that would be sold to Japanese life insurers, regional banks and other institutional investors.
The sale next week would be a first for Japan, it said, following yuan bond sales by British and Singaporean lenders and major firms including US fast-food giant McDonald's and heavy-equipment maker Caterpillar.
"We understand this will be the first issuance of yuan bonds in our country," said a company spokesman.
The company's operations in China include about a dozen branches that supply loans, foreign currency and trade finance.
The sale comes as China pushes to internationalise its currency and follows a thawing in diplomatic ties since last year, when China's President Xi Jinping held breakthrough talks with Japanese Prime Minister Shinzo Abe -- although relations remain tense over territorial spats and Japan's wartime record.
Japanese finance minister Taro Aso held talks with his Chinese counterpart in Beijing this month. During the meeting, China's Lou Jiwei called for "actively promoting practical cooperation," citing yuan bond offerings in Japan as an example, the Nikkei business daily reported.
In 2011, the leaders of both countries agreed to prioritise issuing yuan-denominated debt in Japan but the push stalled as bilateral relations sank.
The same year, McDonald's and Caterpillar both issued yuan-dominated bonds, while Asia-focused lender HSBC held a sale in London in 2012.
In 2014 the International Finance Corporation, a member of the World Bank, issued yuan-dominated bond in London.
