The previous lesson tackled the Western countries with major currencies.
In this lesson, you’ll learn about the economies of the countries with major currencies in the Asia-Pacific (APAC) region.
The APAC region is home to three major currencies:
- The Australian dollar (AUD)
- The New Zealand dollar (NZD)
- The Japanese yen (JPY)
While not a major currency holder, you’ll also read about China’s economy in this lesson, as the country has the second-largest global economy. Its currency, the Chinese yuan (CNY), is steadily rising in popularity as a traded currency.
Lesson Highlights
- The Asia-Pacific (APAC) region is home to three major currencies: the Australian dollar, the New Zealand dollar, and the Japanese yen.
- Japan’s capital, Tokyo, is the world’s second-wealthiest city, after New York City in the US.
- The Bank of Japan handles the country’s monetary policies, but its Ministry of Finance oversees foreign exchange.
Japan
The Land of the Rising Sun is home to the world’s third-largest economy. Japan’s capital, Tokyo, houses over 37 million Japanese citizens, making it the biggest metropolis globally. It is also the second-richest city in the world after New York City.
What it lacks in natural resources, Japan makes up for with technological advances. This East Asian country is the world’s most technologically advanced country and ranks 11th in quality of life.
Japan’s central bank, the Bank of Japan (BOJ), controls the country’s monetary policies. This responsibility was originally shouldered by Japan’s Ministry of Finance (MOF) until 1998 when the Japanese government enacted laws transferring monetary policy oversight to the BOJ.
However, the MOF still retains authority over Japan’s foreign exchange policies, and the two institutions are often at odds.
Population: 123,294,513
Land area: 377,973 square kilometers
Population Density: 338 people per square kilometer
Capital: Tokyo
Head of state: Emperor Naruhito
Head of government: Prime Minister Fumio Kishida
Currency: Japanese yen
Main imports: Petroleum, natural gas, coal, integrated circuits, machinery and nuclear reactors, electrical and electronic equipment, pharmaceutical products
Imports from: China, US, Australia, Korea, Saudi Arabia
Main exports: Automobiles and automobile parts, electronic equipment and electronic parts, steel, semiconductors, machinery
Exports to: China, US, South Korea, Hong Kong, Thailand
Time zone: GMT +09
Australia
Australia was once a penal colony of England during the height of the British Empire’s power. Officially called the Commonwealth of Australia, you can find the Land Down Under in the Southern Hemisphere in the Oceanian region.
Today, Australia ranks 14th among the world’s richest countries. Most of its gross domestic product (70%) comes from its service industries (e.g., finance, tourism, and education).
The Reserve Bank of Australia (RBA) is the country’s primary monetary and fiscal regulator. The RBA has three main objectives as Australia’s premier financial authority:
- Keep exchange rates stable
- Ensure the country’s economic growth
- Maintain a high employment rate
The RBA believes that keeping Australia’s annual inflation rate within 2% to 3% is key to achieving these goals. This central bank has two ways of controlling Australia’s inflation rate: upping cash rates and conducting open market operations.
Population: 26,638,544
Land area: 7,688,287 square kilometers
Population Density: 3 people per square kilometer
Capital: Sydney
Head of state: King Charles III
Head of government: Prime Minister Anthony Albanese
Currency: Australian dollar
Main imports: Mineral fuels, machinery and equipment, automobiles, pharmaceuticals, optical, technical and medical apparatus
Imports from: China, US, Japan, Thailand, Germany
Main exports: Mineral fuels, ores, slag and ash, gems and precious metals, cereals, inorganic chemicals, meat, salt, sulfur, stone, cement
Exports to: China, US, Korea, Japan, India, Taiwan, Singapore
Time zone: GMT +10
New Zealand
New Zealand is an idyllic and mountainous country famous for many things, including being the set of the Lord of the Rings and The Hobbit franchises.
This country is Australia’s closest English-speaking neighbor, as both countries are cut off from many English-speaking countries in the west.
Two main islands, North Island and South Island, along with several smaller islands, make up New Zealand.
Another interesting factoid about New Zealand is its sheep population for which its famous. As of 2022, the country has more sheep than people, with a 5:1 sheep-to-person ratio.
Being a small country, New Zealand’s economy ranks 51st globally. However, its vast foreign bank base, high local interests, and economic stability makes New Zealand’s currency a force to be reckoned with in the forex market.
The Reserve Bank of New Zealand (RBNZ) is responsible for the country’s monetary and fiscal policies. Its board members meet eight times yearly to discuss the bank's policies.
Population: 5,228,100
Land area: 268,670 square kilometers
Population Density: 20 people per square kilometer
Capital: Wellington
Head of state: King Charles III
Head of government: Prime Minister Christopher Luxon
Currency: New Zealand dollar
Main imports: Automobiles, nuclear reactors, electrical machinery and equipment, plastics, mechanical appliances
Imports from: China, Australia, US, Korea, Japan, Singapore
Main exports: Dairy products, wool, wood and logs, sheep and goat meat
Exports to: China, Australia, US, Japan, Korea, Indonesia
Time zone: GMT +12
China
The French emperor Napoleon once allegedly called China “a sleeping giant in Asia.” While this statement’s historical authenticity is murky, its message is not.
China’s economy – along with its population – experienced a massive boom in recent decades. After recovering from economic turmoil, the country rose as the world’s third-largest economy around the late 20th century.
By 2010, it has surpassed Japan as the second-largest economy, just behind the US. China’s population was at approximately 1.4 billion by this time.
The People’s Bank of China (PBoC) is the country’s monetary policy maker. It controls China’s interest rates and oversees financial institutions across mainland China.
China’s currency is the yuan or the renminbi, depending on how you’re using it. If you’re talking about the currency in terms of forex, you use yuan. If you’re referring to the official Chinese denomination, then it’s the renminbi.
The yuan has seen a rise in popularity in the forex market in recent years. In 2022, it ranked 4th as the world’s most-used currency for international payments, overtaking the yen.
Population: 1.4 billion
Land area: 9,706,961 square kilometers
Population Density: 152 people per square kilometer
Capital: Beijing
Head of state: President Xi Jinping
Currency: Chinese yuan or renminbi
Main imports: Integrated circuits, crude petroleum, iron ore, gold, petroleum gas
Imports from: Taiwan, South Korea, Japan, the US, Australia
Main exports: Electrical machinery and equipment, computers, automobiles, plastics, iron and steel products, textiles and apparel
Exports to: US, Hong Kong, Japan, South Korea, Vietnam
Time zone: GMT+8, GMT+7, GMT +6, GMT +5, GMT+4
Now that you’ve become more familiar with the economies of the countries with major currencies (plus China), it’s time to learn how forex brokers work.
