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Japanese officials are more likely focused on the exchange rate of the yen versus China’s yuan rather than against the dollar, according to Citigroup Inc., citing the fact that China is Japan’s biggest trading partner.

For this reason the level at which Japanese authorities may intervene to temper the yen’s gain will be at 12.30 per yuan, equivalent to 84 per dollar, Citigroup analysts led by Tom Fitzpatrick in New York wrote in a report yesterday.

Gains in the yen versus the dollar stalled near the 101 level in 1999 and again in 2004, and at about 12.30 per yuan, the analysts wrote.

“In 1999 and 2004 those moves effectively gave us the base in yuan-yen and dollar-yen for years thereafter,” the report said. “When 101 was the line in the sand on dollar-yen, the U.S. was Japan’s most important trading partner immediate payday loans online. Now it is China.”

The People’s Bank of China has kept the yuan little changed near 6.83 per dollar since July 2008, after a 21 percent gain in the previous three years, to help exporters cope with weakening demand caused by the global financial crisis. The yen has gained 5.2 percent versus the yuan this year.

By multiplying the yuan-yen rate of 12.30 by a dollar-yuan level of 6.8250, the analysts predict the Japanese authorities are unlikely to let dollar-yen trade “much below 84.”

The yen climbed as high as 84.83 per dollar today, the strongest since July 1995, before trading at 85.98 as of 10:51 a.m. in Tokyo. It traded at 12.60 per yuan.

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