The price of popular Umaibo, or “delicious stick” snack bars, recently increased for the first time in 42 years, from 10 yen (8 cents) to 12 yen (9 cents) each.
The popular 100 yen chain stores Daiso and Can Do, the Japanese equivalents of US dollar stores, have not yet become 150 yen stores. But they are changing suppliers, mainly in China, where the yen was buying more.
A cheap yen has always been welcomed in export-oriented Japan, boosting overseas earnings for its manufacturers when they convert it to yen. The operating profit of Japan’s top automaker Toyota Motor Corp. secured a major windfall of 610 billion yen ($4.7 billion) thanks to the favorable exchange rate.
These days, the weaker currency is a mixed blessing.
Tran Ha Van is not at all happy with what is happening with the yen.
For almost 10 years that she has lived in Japan, almost all of her income has been in yen. Every two months, the Vietnamese tech professional sends money to her parents, a retired electronics engineer and housewife.
“What I send them has gone down in value significantly,” she said.
When Tran recently bought Vietnamese food for the Lunar New Year, prices for everything skyrocketed. A gift of a personal computer for her parents, for example, costs more on her credit card, she said.
Tran studied Japanese intensively in Vietnam, graduated from a Japanese university, then worked in a large IT services company in sales and operations management.
She plans to start her own business with the yen she has saved, using her bicultural and bilingual skills to connect Vietnamese businesses, especially in high-tech, with opportunities in Japan.
The price she asks is fixed in yen and has not changed. But the cost of hiring freelance Vietnamese engineers is now higher in yen, Tran said.
“For me, I tend to send more money from Japan to Vietnam than vice versa, so it’s inevitably a bigger minus if the yen goes down,” she said.
The news on the weakening yen was not all bad.
Interest is growing, said Parker J. Allen, who runs a business finding low-cost homes in rural and suburban Tokyo for overseas buyers wanting a second home or office.
It has only made a few deals so far, mostly involving high-profile American business executives who want to live part-time in Japan. It helps bridge the gap between these people and traditional Japanese real estate agencies.
“Most of the time you buy it (the house) for free and you pay for the land. If this 30-plus-year-old house is in great shape, you’re in for a fantastic deal,” he said recently, pointing to one such house, with an elegant tatami room overlooking a garden with rocks and trees.
According to a 2018 government study, these deals include Japan’s many vacant homes, called “akiya,” which number about 8.5 million nationwide, or 13 percent of all homes. Many were once occupied by families whose children had moved away. As parents age and die or move into assisted living facilities, the homes are often abandoned.
Homes often need updating, said Allen, an American who co-founded real estate consultancy Akiya & Inaka two years ago. “Inaka” means “countryside” in Japanese.
But for those with dollars who buy the houses in yen, the added advantage of the exchange rate buys more and represents a considerable saving. The benefit is likely greater than what Allen charges in his advisory fee, which is 100,000 yen ($770) for the first three listed properties.
“There are great properties that are not so expensive. I think we are on the eve of something huge. I think more people are going to realize the great things you can do in the Japanese countryside,” Allen said.
The erosion in the value of the yen is attracting people to new forms of investment in a country renowned for its meticulous savings.
Instead of hiding all their yen savings in a low-yielding bank account, or keeping them in cash, some buy NFTs, or non-fungible tokens, which are created using the same technology as cryptocurrency.
Line, a service of South Korean internet company Naver Corp., has started selling various NFTs, such as those from manga and popular music artists. In the lineup is an NFT of Godzilla versus Hedorah, a monster that looks like a slimy mop, a symbol of industrial pollution and contamination.
Line’s offering targets core fans of the content, not investors. But some Godzilla offerings, which initially retailed for 5,500 yen ($42) each, have already sold out and are skyrocketing in price.
The cheap yen would normally attract foreign tourists eager to take advantage of stronger purchasing power.
But Japan has virtually closed its borders to foreign tourists during the pandemic. Once the country reopens, the economy could get a boost from the weak yen. In 2019, before the pandemic, 32 million people came from abroad.
The government will soon allow a small number of foreign tourists to visit on an “experimental” basis. Only visitors from the United States, Thailand, Singapore and Australia will be welcome at first, and they must have a special visa, be triple vaccinated and meet specific schedules.
Kaori Inoue, who works in international promotion at the Hokkaido Tourism Organization, said she hopes to start inviting travel agency managers from overseas to do business. She is waiting for restrictions to ease further, and for more countries.
“It all depends on the government. Once the changes start, tourists will arrive in droves,” Inoue said.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama