IN THE autumn of 2010, when he was Japan’s finance minister, Yoshihiko Noda decried it as “strange” that China had bought up as much as ¥2.3 trillion (then $25.5 billion) in Japanese government bonds while its own debt was off-limits to outsiders. Now prime minister, Mr Noda is redressing the balance. At a summit in Beijing on December 25th the two countries announced an agreement to let Japan buy Chinese sovereign debt. No sum or timetable was disclosed, though Japanese news media reported the amount will reach $10 billion once China approves Japan’s application.

Both countries say the agreement symbolises the growing importance of their economic ties, which have long been warmer than their diplomatic ones. China is Japan’s largest trading partner; Japan counts as China’s biggest after America. But the deal may also be a signal. Officials in Tokyo fret that China’s purchases of Japanese bonds fuel the yen’s appreciation. By negotiating for approval to own Chinese debt, Japan can register its discomfort with China’s actions and gain some influence of its own.

Japan will not simply be able to buy whatever it likes, however. China seems happy for foreign central banks to hold limited amounts of its bonds as another step in the internationalisation of the yuan. Malaysia reportedly already enjoys the privilege, among others; Japan is set to be the first G7 country to do so. But China will not do anything to compromise its control of the exchange rate.

Fred Bergsten at the Peterson Institute for International Economics, a think-tank in Washington, DC, once argued that America should dispense with the niceties and exert upward pressure on the Chinese currency via the offshore market instead. He advised America to buy instruments such as the yuan-denominated “dim sum” bonds now on offer in Hong Kong. Quite what effect that would have on the exchange rate is unclear, but the message would be unmistakable.