HSBC China has received approval to be a market maker for the direct trading of the renminbi and Japanese yen on the Chinese interbank foreign exchange market scheduled in June.

The company is among the first batch of banks approved by the People's Bank of China, the Chinese central bank, to trade in the two currencies. A market maker refers to a firm that is ready to buy and sell a particular stock on a regular basis at a publicly quoted price. HSBC China will participate in the market upon the launch of RMB-yen trading on 1 June.

HSBC is one of the most active supporters of the internationalisation of the Chinese currency. It was one of the first banks to have RMB services in Japan and has been helping firms hedge against market risks by offering a range of offshore RMB or non-deliverable forwards-based foreign exchange and interest rate products. HSBC was also among the first banks appointed as market makers in China's interbank FX market in 2005.

"Direct RMB-yen trading is a vital move toward building a representative and liquid onshore benchmark for major non-US dollar crosses. It is also a significant step forward in the internationalisation of China's currency, supporting the growing demand for RMB payment and settlement globally," said David Liao, managing director and head of global markets for HSBC China.

The other market makers that made the first batch include Bank of China and Mizuho Corporate Bank (China).

HSBC China is headquartered in Shanghai. Its network currently covers 110 outlets across 32 cities.