Australia depends on the policies made in Japan
The Australian dollar has a lot riding on Shinzo Abe's unusual and revolutionary strategy to stimulate the Japanese economy.
Since early April, the Australian dollar has been the least-loved currency in the global foreign exchange markets with one exception: Syria. The popular explanation for the Aussie's decline is that the Reserve Bank of Australia's announcement on May 8 that the official short-term interest rate would be cut by 25 basis points was an inflection point.
But before the RBA's decision was announced, the exchange rate, as measured against the US dollar, was down 3.5 per cent from its early April peak. The decline now totals 10 per cent.
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