Saba can, of course, just be written in katakana as well, but I'm going to use the kanji for a special bonus at the end of this post, so keep it in mind.
Do you ever "fudge" your numbers? Like, for example, say you're, I dunno, in your late 20's when in reality your 30th birthday was last week? (No, despite what Brett or Jeff or any number of Japanese people may have to say about it, I'm not quite there yet) If so, you've been reading your mackerel.
What does mackerel, regardless of how delicious it might be, have to do with fuzzy math? What I learned way back in Japanese class, and what a cursory Google search has confirmed, is that there really isn't a fully accepted etymology of this phrase, though there are a few theories. There are two that I personally find believable. The first states that this phrase comes from the two essential qualities of saba: it loses its freshness quickly and it is caught in overwhelmingly large numbers. The first quality leads your average fishmonger to want to sell them quickly; accordingly, they have a tendency to count them quickly. They don't have to be especially diligent about keeping track of the actual number because there are so many of them anyway. The main drawback to this explanation is that it doesn't account for the use of the word 読む in place of 数える.
Another explanation comes by way of the word 魚市場, which is (was... among fish-mongers) pronounced isaba, not sakana ichiba, as we might be tempted to read it. When spoken quickly, the word became shorted to saba. Note that 読む in Japanese sometimes has the nuance of "pronounce" as in "read out loud;" hence, this explanation doesn't run into the same problem as the first one.
Either way, I'm going to go ahead and define it as:
Ms. A: Hey B, how tall are you?
B: Hmm, I guess about 6' 3".
C: What's with the number-fudging?
So what's the bonus, you ask?
This is a nerdy thing that those of you who aren't particularly fond of seafood are probably not going to appreciate, but I think that it's pretty cool. I should first disclaim that there are multiple (two) ways that I have seen the kanji for サバ written. The first is as Windows has it, 鯖. Notice that the right side looks almost exactly like the kanji for blue, 青, except that the 月 has become more of an 円. However, sometimes (as in the picture above), you do see it written as 魚+青.
I don't believe that 鯖 is a 国字 (that is, a kanji made up in Japan, not China, to express some Japanese word; the classic example of this is 峠, or a mountain pass), but it just so happens to express a concept about fish that I never heard until I moved to Kyushu. Kyushu, as it turns out, is famous for what are called (especially there) 青魚 or aozakana - blue fish. (This word is somtimes read aouo, and is pretty interchangeable with the word 青物 aomono in Kyushu. Aomono is slightly less precise because it can also refer to vegetables. Another word for this kind of fish is 光り物 hikarimono.) These "blue-fish" are actually grey on their bodies, but blue on the back. The cool thing about the kanji is that it just so happens to assign blueness to the classic example of blue-fish. Neat.
Other examples of blue-fish include アジ (horse mackerel)、イワシ (a kind of sardine)、ニシン (a kind of herring, I think. No, not a red one)、サンマ (pike, also the possessor of awesome kanji), and, depending on who you ask, サワラ (Spanish mackerel - search the tags for "thorough fish whacking" for more information).
Great, now I'm hungry.