Japan welcomed China's decision Thursday to revalue the yuan.

Chief Cabinet Secretary Hiroyuki Hosoda told reporters it was the "first step toward the internationalization of the (Chinese) economy."

Responding to the announcement from the People's Bank of China's that the yuan would be taken off its de facto peg to the dollar, the government's top spokesman said he believed it was a decision reached after much consideration.

"I respect (the Chinese authorities) for it," he said, drawing a comparison between Japan in the 1970s, when it shifted its exchange rate regime to a free-float system.

The last time China changed its exchange rate system was in 1994, when the yuan was linked to the dollar. That peg has remained at around 8.28 yuan to the dollar since the 1997-1998 Asian financial crisis.

On Thursday, the People's Bank of China announced the yuan is being allowed to float against a basket of foreign currencies, which has resulted in a virtual revaluation to a rate of 8.11 to the dollar.

China has been under pressure from other countries to let its currency float more freely.

Critics had argued the dollar-peg arrangement kept the yuan undervalued, giving Chinese exporters an unfair trade advantage.

Other experts, however, have expressed concern that the economies of other countries, including Japan, could be affected negatively if the yuan's revaluation slows China's growth and takes away its competitive edge for an extended period.