As part of the deal, Yahoo Auction listings in Japan will be cross-listed on Ebay, making them available to both Japanese Ebay users and users from the online auction giant around the world.
Yahoo said the move will foster "cross-border trading" and give an extra jolt to Ebay. Ebay previously had a Japanese division but had to close it in 2002 because Yahoo has such a stronghold there.
Because of this disconnect in the usage of Internet sites between Japan and other countries, there was very little foreign involvement in Japanese auctions.
"Now there is going to be a formal channel by which you can sell products from one market into another," said Macquarie analyst Nathan Ralmer in a Dow Jones Newswire story.