(If that title seems weird, try singing it to the Coles supermarket tune.)
This is what the Aussie has been doing with itself for the last 3 months. Looks like it has been officially rejected from the glamour club of world currencies.
A couple of weeks ago I attended the meeting of the Nagoya International PC Club, and no-one had anything good to say about the rise of the Yen. A Japanese attendee who makes a living selling kimonos on e-bay said he could not raise his prices or this American and European customers would stop buying. A Polish developer lamented the fact that he was being paid in British Pounds, a currency which has fallen 50% against the Yen in since 2007. The American attendees were kinda annoyed too, given that their USD holdings have also declined significantly compared to the Yen.
What none of us could work out is why is the Yen so strong? Interest on savings in Yen is abysmal. The best we could come up with was that Japanese believe it is patriotic to hold government bonds and keep their significant savings in Yen in a local bank. Or perhaps that the sudden recent increase in the Yen was due to people getting out of the carry trade because they’re worried that their investment currency will tank.
Share your wisdom in the comments!