As a result of Japan’s monetary policy, the yen continues to grow weaker against the US dollar. That’s a huge boon for inbound travelers from the West, whose dollar and other currencies go farther here. But for Japanese traveling abroad, it’s made life rough. Local media reports that some outbound travelers are even resorting to bringing their own food with them.
Japan’s downward-spiraling yen
The Bank of Japan initially pursued a “weak yen” strategy before Japan loosened travel restrictions and let tourists back in. It did this by keeping interest rates low – for a while, negative – in a bet that issues with inflation and supply-chain issues caused by the Russian invasion of Ukraine were transitory factors.
Since then, however, the strength of the US dollar has continued to sink the yen’s worth on the global currency market. This, despite the BOJ raising rates in what seems as the start of an effort to control inflation.
BOJ now says it may intervene in the currency market if the yen dips to 160 to 170 yen per dollar. In the meantime, Japanese businesses selling goods abroad in USD are enjoying a windfall. Additionally, tourists and some residents who earn in USD and other currencies are seeing their money go further, as they can buy more yen for less.
Unfortunately, that means tough times for those who earn in JPY. Citizens and residents have to contend with rising prices and stagnant wages. Foreign residents servicing debt in USD or who send money to relatives back home are also feeling the pinch.
It doesn’t seem this situation will change any time soon, either. This week, the yen rose to 155 yen per US dollar. As I was writing this, I saw a news alert that it briefly peaked at 158 yen.
Tough time for Japanese tourists to Hawaii and beyond
The monetary crisis is also hitting another segment of Japan’s population: people traveling abroad.
Japan has just entered Golden Week, in which many (but not all) workers in Japan receive a rare week-long holiday. To celebrate, many are traveling domestically. Others are traveling abroad, taking advantage of a strong passport that permits visa-free travel to 190 countries. Some 520,000 Japanese citizens are expected to take off for other countries next week, a 1.7x increase compared to 2023.
Unfortunately, one of the most popular travel destinations for Japanese travelers is Hawaii. That’s bad news for Hawaiian locals, who are finding themselves priced out of housing in the former independent country thanks to tourist-fueled inflation. But it’s also bad news for Japanese travelers, too, who are finding the US colony too pricey for their tastes.
(It’s also bad news for Japanese women traveling solo, some of whom are being turned back at the border. But that’s a different story.)
One woman interviewed by TV Asahi lamented that her 30,000 yen – which, once upon a time, would have yielded closer to USD $300 – only got her USD $189. Others say they’re feeling the shock when they go to the cash register and pay for purchases by credit card. Several say they weren’t prepared for exactly how expensive their trip would prove.
Japanese tourists to Hawaii practice BYOK (Bring Your Own Kome)
That hasn’t stopped people from visiting the islands. Local hotels say they’re seeing a spike of around 70% in Japanese tourists to Hawaii compared to before Golden Week. It just means that travelers are adjusting their plans once they get there.
Many travelers tell TV Asahi they’re economizing by not eating out as frequently and looking for low-cost or no-cost activities. “I’m not doing much [while in Hawaii],” one said. “I’ll just be at the beach. Life’s simple pleasures.”
Some are going even further. One woman, a mom in a family of four, is staying in a rented condo with an attached kitchen so she can cook meals instead of going out. She even went so far as to bring her own rice from Japan.
You may wonder: Is this legal? Technically, rice import isn’t strictly forbidden. However, due to the potential to carry invasive species like insects, the US Customs and Border Patrol says it’s “best to avoid” bringing it in.
Others are just living la vida loca. One woman in a three-generation family of eight says this is her family’s third – and maybe last – overseas trip. Instead of economizing, she says, “I raised the limit on my credit card.”
The irony is that it’s now getting harder to take rice anywhere. Japan is currently in the middle of a rice shortage, with bags of rice disappearing off of shelves. It’s getting tough to find rice to eat at home, much less to take abroad.
Officials at Japan’s Ministry of Agriculture, Forestry and Fishing (MAFF) predict the current shortage will end sometime in September. That should enable Japanese tourists to Hawaii to continue to bring their own food.
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ใใใฃใจใฟใใฎใใผใใใ็ฑณใฏๆๅใใ้ใฎๅฟ้ ใจ่ช็ใฎๆบๅโฆๅๅฎไธใงใไบบๆฐใฎใใฏใค. TV Asahi News
Japan’s yen sags, hits 155 per dollar; US currency advances. Reuters
Question: What is a strong/weak Japanese yen? Bank of Japan
Japanese monetary policy under the economyโs new normal. East Asia Forum
