I'm going to Japan at the start of December. The exchange rate has been pretty stable for a while, but I'm wondering if people think there will be changes over the next 4 months. Should I exchange now or doesn't it really matter when?
Exchange now. Of course, that is just my 2 worth of opinion...or would that be my 2? The Reserve Bank of Australia's current overnight Australian Dollar Cash Rate is 2.0%, and has reduced by 50 basis points in the last 12 months. The last nine AUD Cash Rate decisions since (Nov 2011) have all been reductions. The 1/3/10 year(s) AUD bond curves are all 'pricing in' at least one more 25bp reduction within the next 12 months. The Bank of Japan's Uncollateralised Overnight Call ('Mutan') Rate for the Japanese Yen has been under 0.100% since 2008, and under 1% since the mid-90s. The BOJ also implemented their QE program chasing a 2% price stability target since 2013. (https://www.boj.or.jp/en/mopo/outline/qqe.htm/) You can tell which currency has more room on the way down from a fundamentals perspective. Of course, FX markets are inherently complex systems and this is a horribly simplistic comparison to make. So, thats my (probably flawed) reasoning/rationale acting on the basis of incomplete information. Something like the 2011 earthquake could occur between now and December and cast a serious shadow on the JPY, but thats a Known-Unknown/'Grey Swan' eventuality.
Ok thanjs. I assumed the BoJ doing QE may have forced down their dollar, I wasn't sure how that would compare to our dollar falling. I'll change soon, thanks.
hope you got in before thismorning. Those crazy Chinese have really rocked the boat, they are really setting back confidence in their markets and perceptions about their economy by years, decades perhaps.
