Currently, the U.S. dollar is generally used as the intermediary currency when conducting currency transactions between yen and renminbi on foreign exchange markets. As a result, the price of the yen and renminbi is determined by the cross-currency rate of yen-U.S. dollar and renminbi-U.S. dollar, thereby requiring U.S. dollar settlements.
If a direct exchange market between the yen and renminbi is developed and has a certain degree of liquidity, one 6  BIS central bankers’ speeches  benefit will be a reduction in transaction costs, as the price will be set directly without the U.S. dollar as intermediary.