It is one of the most intriguing currency pairs in the world, coupling a huge commodity exporter with an industrial giant that has practically no natural resources.
The exchange rate between the and the Japanese yen is the meeting place for a global supplier and one of its biggest customers.
It not only strikes the price at which Japan’s mighty industrial machine will buy South Africa’s many and varied commodities, but acts as an index of the health of both these very different economies.
But for the Rand, the best of 2018 is very definitely in the past.
A powerful bounce in the wake of Cyril Ramaphosa’s appointment as President in December 2017 was thrown into reverse as sentiment soured once more again towards the continent’s leading industrial economy.
In the dying days of previous President Jacob Zuma’s scandal-hit reign, in November 2017, it cost well under eight yen to buy one Rand.
Rising US rates add to the pressure
But in the euphoria that greeted the arrival of Mr Ramaphosa, a successful businessman who previously headed South Africa’s most powerful trade union, the mineworkers, the Rand strengthened against the yen so that a Rand cost more than nine yen in February.
As a major commodity exporter, South Africa and its economy are intimately bound up with demand for natural resources such as coal, iron ore, manganese, nickel, platinum and , with which the country is richly endowed and serve as the basis of its relationship with Japan.
In addition, rising US interest rates may divert capital away from a country that badly needs cash inflows to fund a long-running current account deficit.
IMF report is downbeat
Trade tensions between the US and China can only cast a shadow over a commodity-trading nation, and while Mr Ramaphosa remains popular, there have been suggestions that he is finding it more difficult than some had expected to reform the country’s governance.
Underlying economic weakness is reflected in high levels of joblessness. According to America’s Central Intelligence Agency: “Official unemployment is roughly 27% of the workforce, and runs significantly higher among black youth.”
In July, the International Monetary Fund (IMF), in its latest health check for the South African economy, was generally downbeat. It noted: “Reflecting slow progress on reforms, weakened governance, and elevated policy uncertainty, growth remains subdued.
The Rand’s recent woes are not confined to the yen. Against the US dollar during the last five years, the Rand’s peak, hitting R10.32 to $1 on 14 May 2014, while the trough was seen on 18 January 2016, when it cost R16.88 to buy $1. The rate was last in single figures in October 2013, trading at just under R10.
Some expect a second “Ramaphosa Bounce” should his African National Congress party win convincingly in elections due in May. On 15 December, the South African publication Business Tech reported that a survey of executives suggested some thought the Rand could gain more than 5% on foreign exchanges in the event of such a victory.