China lets yuan fall further, fuels fears of 'currency war'

SHANGHAI (Reuters) - China's currency fell to a four-year low on Wednesday, slumping for a second day, after a central bank devaluation on Tuesday, and government sources believe the yuan may be allowed to slide even further to help the country's exporters.

ASIA MARKETS: Asian Shares Weaker; Tokyo Stocks Tumble

A sharp slowdown in China's economy is rattling Asia's largest stock markets, with Japan falling 3.1% Friday and Hong Kong set for its worst week in nearly two years.

China's yuan rises past 6.50 against the US dollar

China's currency, the yuan, strengthened past a key level against the US dollar on Friday, as part of wider efforts to contain inflation on the mainland.

The yuan broke past 6.50 against the dollar, a level not seen since 1993.

Traders and currency strategists believe the move is a sign that China's central bank is prepared to allow the currency to appreciate further.

China looks to expand currency’s global reach

The shop assistant thumbs the red, 100-yuan bills that bear Mao Zedong's distinctive face, checks the amount is correct and places it in the till next to Hong Kong dollar notes and coins, without a sideways glance.

It's a typical day in Bonjour, a cosmetics store popular with the vast numbers of shoppers from mainland China who are spending their newfound wealth in the former British colony.