Japan Set to Unveil India Currency Swap Deal

Japan is poised to unveil a currency-swap line with India in its second international financial agreement with top Asian powers this week. Finance Minister Jun Azumi told reporters today in Tokyo that Japan is negotiating an agreement with India, the third- largest economy in Asia, after China and Japan. The deal is likely to be unveiled during a trip by Prime Minister Yoshihiko Noda to India that starts today, with the amount of the swap line about $10 billion, a Japanese government official said on condition of anonymity.Japan two days ago agreed with China to promote direct trading of the yen and yuan without using dollars and start purchases of Chinese bonds for its foreign-exchange reserves. The nation has also deployed some of its reserves, the world’s second biggest, after China’s, for aiding Japanese companies in making overseas acquisitions.For India, the deal expands the ability to respond to financial shocks as Prime Minister Manmohan Singh’s administration contends with a slump in the rupee that risks stoking inflation.