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How important is local hosting in the Australia market?

12:48 am on Oct 24, 2012 (gmt 0)

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I have a website for the Australia market that is hosted in Australia. The host is an ISP, so it's not high quality, and we're seeing a lot of down-time on their servers. It's time to look at other hosting options.

I was wondering how important it was these days to have my .au website hosted down under. I have a nice, speedy, stable server in the US that I'd prefer to use. Or I have hosting in Japan. Do I need to look for something local, or can I consider other options?
9:55 am on Jan 5, 2013 (gmt 0)

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My main market is East Asia. My main competitor hosts in Australia, even though their bulk traffic come from East Asia.

I used to host in Singapore, but now have my server placed in a UK data centre (I get to use the iPlayer now :D but that's just a happy by product). It hasn't discernably slowed down the site for my Asia based visitors at all.

I'd go for Japan personally, if you already have hardware in place. (or Hong Kong, or Singapore)