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Yen pushes 5-year high against yuan

The yen rose to a near high against the yuan Tuesday, spurring concerns over its impact on Chinese tourism to Japan. But analysts said the rising yen, while posing a threat to export-driven Japan, will have little effect on trade between the two sides.

The yuan was lower against the yen Tuesday at 8.0545, nearing a low of 8.0606 on August 25 since China's currency reform in 2005, according to data from the China Foreign Exchange Trading Center published on the website of the People's Bank of China. The yuan has been down around 10 percent against the yen over the past three months.

Worries are mounting concerning the US economic recovery in the wake of weak economic data, which showed high unemployment rates, a sluggish property market and a slowing manufacturing sector, resulting in the yen's 15-year high against the dollar. The yuan's value, which remains stable against the dollar, was therefore at a low against the yen, said Chang Jian, an economist with Barclays Capital based in Hong Kong.

The Japanese government announced plans for a stimulus package worth over $10 billion Monday in an attempt to curb the impact of yen's rally. But Chang said Japanese government's efforts will not stop a strong yen soon, given the huge transaction volume in current foreign currency market.

But Chinese tourism to Japan is likely to get more expensive due to the rising yen.

Tour prices for upcoming National Day Holiday in October have already been set, so the rising yen won't scare off tourists now, said Zhang Xiaosa, an employee with China International Travel Service Beijing. Many average tourists may reduce their expenditures in Japan while high-end tourists would be hardly affected, she said.

It won't have too much of an impact on tourism, said Sean Darby, head of regional strategy at Nomura International.

"It will help China maintain a weak exchange rate and keep exports firm," Darby said.

Japanese exports to China tend to be value-added, but its impact on trade between the two sides on the whole should be small, he said.

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