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China Seeking to Succeed Where Japan Failed in Yuan Global Push

  • Major reserve currency impossible with closed markets: analyst
  • Yen’s challenge to dollar petered out as economy declined
An enlarged Chinese 100 Yuan bank note in a museum in Beijing.

An enlarged Chinese 100 Yuan bank note in a museum in Beijing.

Photographer: Kevin Lee/Bloomberg
Updated on

As China’s yuan takes the first steps toward becoming a global reserve currency, Japan offers a lesson on how hard it is to rival the dollar’s supremacy.

The Japanese yen’s share of global reserves reached a record 8.5 percent in 1991 as the nation’s post-War industrial boom made its economy the world’s second-largest. But its economic decline soon resulted in its clout shrinking as the euro gained ground and the greenback re-asserted its dominance. While the yen is still ranked third for trading and fourth for payments, it now accounts for just 4 percent of world reserves, compared with the dollar’s 64 percent and the yuan’s 1 percent.