China - Did the PBOC signal overnight that more yuan weakness is on its way?

The China Foreign Exchange Trade System (CFETS) is a unit of the People's Bank of China that runs the interbank foreign-exchange market

• CFETS publishes a monthly 'review' of FX and the yuan
• In December it launched a trade-weighted renminbi (RMB) index comprising the currencies of 13 of its major trading partners
• In its most recent review, published overnight, CFETS said the yuan exchange rate will see increased flexibility "with reference to" what currencies make up the index basket
• This is being read as implying more flexibility for the yuan to rise and fall depending on how these basket currencies perform against the USD
• Given the BOJ move to negative rates and the impact this has had to lower the yen, it seems likely that the next official moves on the yuan by the PBOC will be to weaken it

I'll be on the lookout for more on this.