The RMB exchange rate against the Japanese yen hit a new high

The RMB appreciated against the Japanese yen, reaching its highest level since China switched to a managed floating exchange rate system in 2005. Against the backdrop of declining US-China trade, China’s exports to Southeast Asia and Europe increased, leading to a wider trade surplus. With more transactions settled in RMB and its internationalization progressing, the RMB is also becoming a more attractive option for diversifying investment risks.

On April 13, the RMB exchange rate against the Japanese yen reached a range of 23.40 yen to 1 RMB. The target for the end of 2025 is 22.0-22.4 yen to 1 RMB. The RMB exchange rate against the US dollar reached 6.80-6.84 yuan to 1 US dollar on April 14, the highest level of RMB appreciation in three years. On April 14, the General Administration of Customs of China released trade statistics for March (in US dollar terms), showing a trade surplus of US$51.1 billion after deducting imports from exports. This sustained trade surplus provided support for RMB buying.

Although the tariff policies of the Trump administration in the United States have led to a decrease in trade between the two countries, China’s overall trade data for 2025 shows that exports will grow by 5.5%, with growth in exports to Southeast Asia and Europe.

According to trade statistics from Japan’s Ministry of Finance, Japan has consistently maintained a trade deficit with China. Daisaku Ueno, chief foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities, stated that before the cooling of Sino-Japanese diplomatic relations, the tourism surplus from Chinese tourists visiting Japan offset a quarter of the trade deficit with China. He added, “The pressure for RMB appreciation due to actual demand settlement in trade and services balances remains this year.”

Toru Nishihama, an economist at Dai-ichi Life Asset Management Research Institute, stated, “While emerging market currencies are fluctuating due to the situation in the Middle East, the Chinese yuan is relatively stable.” In terms of diversifying investment risks, yuan-denominated bonds are increasingly favored by investors. However, excessive yuan appreciation could put downward pressure on exports; therefore, Nishihama believes, “The general direction of yuan appreciation will not change, but relevant departments may curb rapid yuan appreciation.”