Yen promoted as common currency

Yen promoted as common currency

TOKYO (Nikkei): The Ministry of International Trade and Industry and utility firms are pushing to make the yen the common currency in settling accounts for imported natural resources from other Asian nations, the Nihon Keizai Shimbun reported in its Saturday edition, citing sources.

The move would provide Asian recipients of Japanese aid loans with less foreign exchange risk, allowing them to receive yen on exporting natural resources and use the currency when repaying loans to Japan.

Malaysia recently agreed to consider a Japanese proposal to begin paying yen for liquefied natural gas (LNG) exports in a year or two. In August, MITI, Tokyo Electric Power Co. and Tokyo Gas Co. proposed yen settlements for a Malaysian project, providing 7.4 million tons of LNG worth 143 billion yen annually, 15 percent of Japan's total LNG imports.

Under the proposal, the LNG contract price will be in dollar terms, as commonly practiced, and converted to yen according to the foreign exchange rate at the time of payment.

Japan is offering a similar proposal to Indonesia, targeting 3.5 million tons of LNG imported annually by a venture involving TEPCO and Tohoku Electric Power Co.

China is also being asked to accept part of payments for imported coal in yen.