THE yuan is continuing its appreciation against the US dollar, but volatility yesterday subsided as market participants were sidelined awaiting central bank action. The yuan yesterday rose to 8.3784 from 8.3823 to the dollar, up 39 basis points, following a surge on Tuesday when it firmed 251 basis points. The yuan has risen 0.34 per cent in the past two days at the Shanghai-based National Foreign Exchange Centre. It has now appreciated by about 3.7 per cent since January 1 last year, when China abandoned the dual exchange rate system. Analysts said the People's Bank of China (PBOC), the major US dollar buyer in the domestic market, had scaled down its purchase of foreign exchange, worrying that the buying orders would stimulate money supply and inflation. Financial institutions were said to have dumped the dollar in previous sessions. 'There are less dollar selling orders today. Some are adopting a wait-and-see attitude as they want to know whether the central bank will come out and prop up the dollar,' an analyst in Shanghai said. However, a trading system change at the swap centre had made detecting the PBOC's trading activities difficult. As China had suffered higher foreign debt burden due to yen's appreciation against the dollar, an analyst said, it was likely that China was selling the US currency and buying the Japanese unit.