Several Australians live in Japan and the reverse holds true as well. As a result, there is often a need to transfer money between these countries. In 2016, around U.S $210 million was sent as remittances from Australia to Japan. In the same year, around U.S. $56 million was sent from Japan to Australia. Bilateral trade of goods and services between both nations in 2017 accounted for over AU $71 billion.
The AUD/JPY currency pair was the ninth most liquid currency pair in January 2018, accounting for around 4.92% of the market share.
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Australia adopted the dollar to replace the previously prevalent Australian pound in 1966. The new decimalized dollar came with 100 cents, and did away with shillings and pence that accompanied the pound. The country shifted to polymer banknotes in 1988.
Other than Australia, the use of the Australian dollar is also prevalent in Kiribati, Tonga, Papua New Guinea, Nauru, Tuvalu, and Vanuatu.
The Australian dollar was pegged to the pound sterling since its introduction, and then to the U.S. dollar from 1973. It moved to the free floating regimen in December 1983. In April 2016, the share of the Australian dollar in the global foreign exchange market turnover was close to 7%, making it the world’s fifth most commonly traded currency.
|Bank notes||$5, $10, $20, $50, $100|
|Coins||5c, 10c, 25c, 50c, $1, $2|
The Japanese yen has been used as the country’s official currency since 1871. Outside of Japan, its official use is found in Zimbabwe, where other currencies such as pound sterling, euro, U.S. dollar, Australian dollar, Indian rupee, South African rand, Botswana pula, and Chinese renminbi also serve as legal tender.
The Japanese yen’s share of the global forex market turnover in April 2016 stood at more than 21.5%, which made it the third most traded currency globally. It is also the world’s third most favored reserve currency. The Japanese yen takes the titles of the most heavily traded and most liquid currencies in Asia.
Japan’s shift to the fixed exchange rate system when the yen was pegged to the U.S. dollar following the U.S. dollar’s devaluation in 1971 did not stay in effect for long. This was mainly because the supply and demand in the forex market caused undue pressure, resulting in a number of countries moving to the free-floating system.
|Sub unit||1/100 - sen|
1/1000 - rin
|Bank notes||JPY 1000, JPY 2000, JPY 5000, JPY 10,000|
|Coins||JPY 1, JPY 5, JPY 10, JPY 50, JPY 100, JPY 500|
Australian Dollar / Japanese Yen Historical Rates
Until late 1974, the Australian dollar performed rather strongly against the Japanese yen. In July 1974, the Japanese yen was trading at around ¥442 against the Australian dollar. However, the 1973-1975 global recession, coupled by Australia’s post-war economic boom ending with “stagflation” in the early 1970s, saw Australia battling rising inflation. By mid 1974, Australia had entered economic recession.
The Australia dollar began to steadily lose value against various currencies, the Japanese yen included. Its predominantly downward trend continued until mid 1978. In October 1978, the Japanese yen was trading at around ¥212 against the Australian dollar. From then, until the end of 1984, the value of the yen hovered largely between ¥210 and ¥275 against the Australian dollar.
The Australian dollar suffered in value again after it adopted the free floating regimen. By mid 1986, the yen was trading at around ¥91 against the Australian dollar. Since then, the value of the yen has fluctuated largely between ¥57 and ¥120 against the Australian dollar. It got to its best ever mark of around ¥57 against the Australian dollar in January 2009, shortly after the global financial crisis.
Given the strong trade and economic ties between the two countries, any major volatility in the AUD/JPY currency pair seems unlikely in the near future.
AUD/JPY in the last five years
|AU $1 =|
|1 July, 2013||JPY 87.92|
|1 July, 2014||JPY 95.56|
|1 July, 2015||JPY 90.54|
|1 July, 2016||JPY 77.55|
|1 July, 2017||JPY 88.23|
AUD/JPY in the last five months
|AU $1 =|
|1 April, 2018||JPY 82.33|
|1 May, 2018||JPY 82.36|
|1 June, 2018||JPY 81.95|
|1 July, 2018||JPY 83.11|
|1 August, 2018||JPY 79.92|
What Affects AUD/JPY Rates?
While both the Australian dollar and Japanese yen are major currencies, the AUD/JPY pair does not count as a major pair. Despite the strong trade relations between both countries, the yen appears to have a stronger relationship with the American dollar. As a result, any significant change in the U.S. economy may have an effect on how the AUD/JPY currency pair performs.
Japan, unlike Australia, maintains a strict currency intervention policy, owing to which the yen has managed to hold its own against the Australian dollar. In addition, the downward pressure faced by Australia because of the trade surplus between both countries makes the yen the stronger of the two currencies.
In 2016, 2017, and 2018, the value of the Australian dollar dipped slightly around May and June. This may well be indicative of the effect that the Japanese tourist season has on the value of the Australian dollar.
Other factors that tend to affect how the AUD/JPY currency pair performs include inflation rates, Australia’s reliance on commodities, oil prices, natural disasters, gross domestic product (GDP), as well as the manufacturing demand in Japan.
Anyone who wishes to send money from Australia to Japan or from Japan to Australia might benefit by taking a look at AUD/JPY exchange rates provided by different money transfer companies. When comparing your options, remember to take a look at the fees you need to pay as well.