Japan has won approval from Beijing to buy Chinese government bonds for the first time, Tokyo's Finance Minister Jun Azumi said Tuesday, in a move aimed at forging closer ties between the Asian giants.
Japan was cleared to buy issues worth $10.3 billion, Azumi told a news conference in Tokyo.
Japan and China had initially agreed to the bonds purchase in December, subject to regulatory approval, as part of a wider deal aimed at stabilising Asian financial markets amid global economic turmoil, Azumi said Tuesday.
Under the deal, Beijing gave the green light for Tokyo to buy 65 billion yuan ($10.3 billion) in Chinese public debt, but completing the purchase "will take several months because of some administration work", Azumi said.
"We also need to consider the environment in the market in deciding when to buy the bonds," he added.
"We will start purchasing in small amounts, considering various viewpoints of asset management."
The purchase was part of a wider deal between China and Japan, the world's second and third biggest economies respectively, that was aimed at securing stronger economic ties between the two countries.
Unlike many nations, China does not allow investors to freely purchase its sovereign debt, instead requiring them to be approved by Beijing.
China meanwhile has been investing in Japanese government debt in an apparent bid to shift some of its foreign exchange reserves -- the biggest in the world -- into yen from the dollar amid concerns about the European debt crisis and sluggish growth in the West.
The December deal, following talks between Japanese Prime Minister Yoshihiko Noda and Chinese premier Wen Jiabao in Beijing, aimed to include "supporting sound development of the yen-denominated and the yuan-denominated bond markets" but no further details of the Japanese purchase were given at the time.
The Asian economic powers also agreed to promote the use of their currencies in bilateral transactions -- such as yuan-denominated foreign direct investment by Japanese companies in mainland China -- to reduce foreign exchange risks.
"I think this is an appropriate amount for the initial purpose of strengthening bilateral economic ties," Azumi said Tuesday, referring to the bonds purchase.