In 2004 the New Zealand dollar was worth 44 Japanese yen. By the third quarter of 2007, just before the global financial crisis got into its stride, the kiwi had more than doubled to Y96. By the first quarter of this year it was once again back to Y44.

These movements will have created a headache for any businesses endeavouring to trade between the two island nations. Yet rather than being due to perceived swings in intrinsic value of these currencies and the strength of their underlying economies, they were largely caused by financial investors. These carry trade-hunting speculators borrowed cheaply in Japan and put the proceeds to work in high interest rate New Zealand during the good times, only to unwind their positions as the financial crisis struck.