BEIJING - After Japan cranked up currency printing, the Japanese yen retreated to an almost 33-month low against the US dollar on Monday, and the weakening currency could affect China's economy.

Japan instituted aggressive monetary quantitative easing policies early this year to stimulate its economy, but the policies have been driving down the value of the yen.

The currency has fallen 20 percent over the past four months as a result of Japan's bold inflationary move.

Although the Group of 20 nations declared last week in Moscow that there would be no currency war, a number of Asian currencies, including the Korean won and New Taiwan dollar, have devaluated alongside the weakening Japanese yen.

"Although the monetary policy situations in East Asia have not developed into a 'war,' a depreciation race has emerged in the region to a certain degree," said Liu Dongliang, a senior finance analyst with China Merchants Bank.

With concerns over how the QE could affect Japan's neighbors, Chinese Finance Minister Xie Xuren said at the G20 meeting that developed countries should reduce the negative impacts of the QE on other countries.

A weaker yen will put appreciation pressure on other currencies and lead to escalated trade frictions, said Zhang Ming, a senior economics researcher at the Chinese Academy of Social Sciences.

According to the calculations of Peng Wensheng, chief economist at China International Capital Corporation, a 20-percent depreciation of the Japanese yen against the Chinese yuan could lead to a 2.5-percentage point drop in China's exports.

However, Peng said China's export dependence on Japan has declined sharply, reducing the weakened yen's impact on China's foreign trade.

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