The Chinese yuan moved in tight ranges against the U.S. dollar on Monday, after the People's Bank of China widened the currency trading band to allow greater volatility in the dollar-yuan exchange rate.
The Chinese central bank on Saturday widened the floating range of the yuan's exchange rate against the U.S. dollar to 2 percent, from 1 percent range it allowed previously.
The yen showed little reaction to the PBOC action, trading near last week's closing value of 6.1505.
The central bank on Monday set the central parity rate for the yuan to 6.1321 per dollar, compared to Friday's rate of 6.1346.
The move signals commitment from Chinese policy makers to grant the market forces a decisive role in the economy.
"With the market-oriented exchange rate formation mechanism for promoting reform, the future of the RMB will work with major international currencies, as there is sufficient flexibility in the way volatility will be the norm, the central bank said in a statement.
The yuan's trading band was last expanded in April 2012, to 1 percent from 5 percent.
