Exchange rates and imports... a generalisation

The Japanese used car market, particularly for cars that can be exported to Australia, is significantly influenced by exchange rate fluctuations. Since cars are priced in Japanese yen (JPY), any change in the exchange rate between the yen and the Australian dollar (AUD) can impact the perceived value of these vehicles for Australian buyers.

Here’s how it works:

1. Stronger Australian Dollar (AUD) Against the Yen (JPY): If the AUD strengthens against the yen, Japanese cars become cheaper for Australian buyers. This can lead to an increase in demand, as the same amount of AUD can buy more cars or more expensive models. As demand rises, prices in the Japanese market might go up due to higher international interest, particularly in desirable models like JDM cars.

2. Weaker Australian Dollar (AUD) Against the Yen (JPY): When the AUD weakens, it becomes more expensive for Australians to import cars from Japan. This could reduce demand from Australian buyers, leading to potential price drops for certain vehicles in the Japanese market, especially for models primarily sought after by international buyers.

3. Impact on Importing Costs: Beyond the price of the car itself, exchange rates also affect related costs, such as shipping, insurance, and compliance, all of which may fluctuate based on currency strength. A favorable exchange rate can make the entire import process more economical.

So, exchange rates do play a key role in determining how much value is realized when importing cars from Japan to Australia. Traders and buyers often watch these fluctuations closely to time their purchases for maximum value.