The Falling ¥

[PeterRS]

I can't help wondering (useless exercise, I know) how much further the ¥ will fall against other major currencies. When I first visited 45 years ago, the rate was US$1=¥250. Over the next decade, the US administration worked hard on getting Japan to revalue its currency. By the time I went to work in Tokyo the rate against the dollar was about ¥159. By the time I left it was up to ¥121. It then hovered for quite a number of years reaching its all-time high of ¥76 in August 2011. Pre-covid it was around ¥110. Since 2022 it began its major decline. Great for visitors, though, as prices in the country are geared to the local population rather than tourists. And even for tourists, with the crash of tourism from mainland China, prices are amazingly low. 

[a-447]

Back in the early 1970s 1 Australian dollar was worth around 450 yen!

Today it's 114 yen.

Mind you, back then the cost of living in Japan was very high. Prices for many things haven't really changed all that much over the years.

Compared to prices here in Australia, Japan is ridiculously cheap - especially food and drink.

Walking around Ueno earlier this month I saw a sign offering 2 hours all-you -can -drink for 900 yen (183 baht, A$ 7.90). A medium sized beer in a pub here costs around A12.

Sadly, I'm not a drinker!

[PeterRS]

Japan always had some crazy prices. I remember one time staying wth friends near Roppongi Crossing. Nearby was a booze shop. It was selling bottles of Dom Perignon champagne at prices cheaper than Duty Free at any airport! 

On a first visit in the early 1980s, I noticed in the window of an uparket retailer a bottle of Remy Martin XO brandy at ¥50,000. Expensive then at around US$200. By the time I ceased working there and returned to Hong Kong, that same bottle was in the same window at exactly the same price - yet in US$ terms it was over $410. I asked the manager why the price had not been brought down to around ¥25,000. He said that Japanese people perceived the value of a product and if he brought the price down it would be regarded as inferior! Odd!

[a-447]

20 minutes ago, PeterRS said:

I asked the manager why the price had not been brought down to around ¥25,000. He said that Japanese people perceived the value of a product and if he brought the price down it would be regarded as inferior! Odd!

Not odd at all.

In Japan people believe that you get what you pay for. The thinking is, if it's cheap the quality is poor. It's why brands like Louis Vuitton and Gucci sell so well in Japan.

Alcohol is ridiculously cheap in Japan. Suntory Old (daruma) whisky costs 1900 yen (A$16.50) in Japan. In Australia the same whisky is A$109.

[PeterRS]

There used to be a Louis Vuitton store in the lobby of one of Hong Kong's top hotels, The Peninsula. On many days of the week you simply could not get inside the store and there would be a queue of young Japanese office ladies waiting to get in. Some Japanese tour operators organised luxury shopping tours to Hong Kong where these types of luxury goods were a good deal cheaper than in Japan. Many of these Japanese shoppers reckoned they saved more than the cost of their air fares and hotel rooms because their purchases were so much cheaper in Hong Kong.