If you earn in yen and send money home to Australia, this year has quietly cost you.
Not because you did anything wrong. Because the yen fell out from under you.
What moved it
The yen is at its weakest against the US dollar since 1986. Forty years. Australia's cash rate sits near 4 percent. Japan's sits close to zero. Money flows to where it is paid more, and right now that is not Japan.
So the Australian dollar buys more yen than it has in years.
Read it carefully
This is not a strong Aussie story. It is a weak yen story.
The Aussie against the yen is trading around 114, up from the mid-90s a year ago. Dollar-yen touched 163 this week, a level nobody has seen since the 1980s. Tokyo is watching for intervention. Nothing about Australia changed. The floor gave way in Japan.
AUD/JPY Daily Chart
What it means in an account
Say you are an Australian playing in Japan. Paid in yen. Sending money home.
A year ago, 90 million yen converted to about A$947,000. At today's rate it lands as about A$789,000. Same contract. Same yen. A$158,000 less arrives.
The number on the contract does not change. The number that arrives does.
And here is the part most people miss. If that money hits an Australian bank account, the bank converts it the day it lands, at its own rate. That spread costs 3 to 5 percent. On A$800,000, that is another A$24,000 to A$40,000 gone. Quietly. On top of the market move.
The other direction
Flip it around. A Japanese athlete playing abroad, paid in a firmer currency and sending money back to Japan, is having the best year of their career on the exchange rate alone.
Same market. Opposite pocket.
That is the whole game. Whether a currency move helps you or hurts you depends entirely on which way your money is travelling.
What you can do about it
Two tools.
A forward contract locks today's rate on money you have already agreed to receive. If the deal is signed and the payments are coming, you can fix the rate now and stop guessing.
A limit order sits above the market on money you have not converted yet. It fills automatically if the rate climbs to where you want it. You do not have to watch screens. You set the number.
The transfer window, you cannot control. The rate, you can.
Chris / SportsFX
Rates are indicative mid-market levels for information only and are not investment advice.