Japanese face the reality of a “fallen Japan” once again as they resume overseas travel

Cheap shopping spree abroad” is now a thing of the past.

Traveling abroad, indulging in spending sprees and shopping sprees. For Japanese people today, this is a thing of the past. When one goes abroad, one finds that many countries and regions are clearly more expensive than they were a few years ago. Conversely, some Japanese who have recently returned to their home countries for a short period of time have commented that “everything is cheaper in Japan. Although there has been a rush of price hikes in Japan, they say that “everything is still cheap” in Japan.

For more than two years, the new COVID-19 crisis made it impossible to travel abroad casually. The easing of entry into Japan has finally begun, and the number of Japanese traveling overseas began to increase around this year’s major holidays (GW). It has been reported that the number of international flights has been increased and sales of tours have resumed for the summer vacations.

The author visited the U.S., Europe, and Southeast Asia from last fall through this year. In each of these countries and regions, although I had been aware of the rising cost of living even before the COVID-19 crisis, the combination of the weak yen and inflation made me realize that Japan is becoming poorer and poorer.

In the U.S., a set hamburger costs more than 1,000 yen.

First of all, the United States. When I visited the U.S., the dollar was still 110 yen to the dollar. Chinese food and hamburger sets cost $8 (about 880 yen), rental cars cost $84 (about 9300 yen) per day, and 3-star hotels cost $125 (about 14,000 yen) per night. Before Corona, the same set of hamburgers was $6 to $7, so I felt the price had gone up a bit. At the current exchange rate of 135 yen to the dollar, $8 is more than 1,000 Japanese yen.

What was more surprising at the time was a part-time job offer posted at a hamburger store. The job offered wages ranging from $17.95 to $20.75 per hour, health insurance, paid vacations, and free meals. That was more than 2,000 yen then, or about 2,800 yen now. Incidentally, even in Tokyo, the highest city in Japan, the minimum wage is 1,041 yen per hour.

Some media reported that they went to Hawaii for a major holiday this year and were surprised at the high cost of living there. The fact that Hawaii has always been more expensive than the mainland and the yen’s depreciation made them realize this even more, and they were probably the first to say “everything is expensive” when they were interviewed.

Daiso” in Singapore raised its prices to a flat 2.14 SGD (approx. 214 yen).

Next, Asia. The author visited Singapore in June 2022. The most expensive thing I felt was the cost of hotels. 3-star hotels were almost impossible to find for 10,000 yen per night, and it was common to spend 20,000 to 30,000 yen per night. 1 Singapore dollar (SGD) was about 86 yen, but this time, due to the weak yen, 1 SGD = 100 yen.

The local Daiso store also raised its prices from the basic 2 SGD to 2.14 SGD in May of this year, and public transportation prices were also raised in December of last year. The cheapest chicken rice I ate there was 3.5 SGD (about 350 yen), and I heard locally that further price hikes are possible in the future.

On the other hand, an acquaintance of mine who traveled to Bangkok, Thailand during this year’s GW said, “Food and beverage prices have been inflated by about 10% in the past 10 years, and it feels as if the cost of food and beverage has risen 1.5 times from 10 years ago.

For example, the price of all-you-can-eat revolving Thai Suki hot pot (shabsi) went up from 399 baht in 2013 to 429 baht in 2022, and the price of khao mangai went up from 40 baht in 2015 to 50 baht in 2022, across the board. Moreover, there has been a change in the local Thai population, “In restaurants where there were almost no locals 10 years ago, this time there are all locals. In other words, I realized that income in urban areas has been rising in Thailand as well”.

Western Europe is now “a different world” and local residents also screamed

Furthermore, Europe has become even more expensive locally over the past few years. In April of this year, when the author visited, 1 euro = about 136 yen. Eating out” was especially expensive. The Marimekko headquarters in Helsinki, Finland, has an employee cafeteria that is open to the public, and the price of a buffet lunch was 11 euros in 2018, but this time the price had increased to 13.40 euros (about 1,900 yen).

In France, a Starbucks Frappuccino costs €5.95 (about 820 yen), a salmon sandwich €5.5 (about 750 yen), etc. Since it was impossible to eat out for every meal, I bought sushi packets and cup noodles with half-price stickers at the supermarket at closing time, or made do with miso soup that I brought from Japan.

An acquaintance of mine who had recently returned to Japan temporarily from Italy was always talking about how inexpensive Japan is whenever he went out to eat or shopping. A lunch set that costs less than 1,000 yen in Japan costs around 20 euros (about 2,700 yen) in Italy. Even a pizza, which is one of the cheaper items, costs 7 to 8 euros (about 1,100 yen) in tourist areas, and drinks and table charges are also added. Lunch at a bar is no longer 10 euros (about 1,350 yen),” he said. He visited “Daiso” in Japan for the first time in two and a half years and was surprised to find that the price was still 100 yen without tax and the selection of goods was even more extensive.

Comparing prices around the world for a “Big Mac” and just three years of COVID-19 crisis…

A useful economic guideline for comparing prices and currency values around the world is the “Big Mac Index,” which compares prices of McDonald’s hamburgers. The British economic magazine “The Economist” devised the index in 1986 and publishes it twice a year.

The price of a Big Mac has remained unchanged at 390 yen in Japan for the past several years. On the other hand, in the U.S., the Eurozone, Singapore, and other countries, the price is becoming more and more expensive, combined with the depreciation of the yen. In the case of the U.S., the price was a little over 600 yen in January 2019 and is now about 785 yen, almost double the price in Japan. In other words, the Japanese yen is the cheapest of all developed country currencies. In fact, the value of the Japanese yen is already lower than that of emerging economies such as Thailand, Brazil, South Korea, and China.

Countries at the same level as Japan include Croatia, Poland, Guatemala, and Peru. Below Japan in Asia are countries such as Vietnam, Hong Kong, Taiwan, and Malaysia, which are naturally the lowest among the G7 (Group of Seven) industrialized nations.

In addition, the “Consumer Price Index” in the “World Statistics” published by the Japan Institute for Labour Policy and Training (JILPT) shows that prices in Japan have also risen noticeably in recent months. However, it is also clear that prices are still cheaper than in other countries.

The day is near when the phenomenon that occurred overseas during the bubble period will befall the Japanese people!

You may think that no matter how high prices are overseas, “it doesn’t matter because we are only in Japan. However, this is not the case, and a situation is about to occur in the near future.

Foreign visitors to Japan are currently only on tours, but in the not-too-distant future, they will be able to do things on their own. When that happens, we can expect to see foreigners enjoying themselves in Japan.

In mid-May, a Japanese who temporarily returned to Tokyo from New York said, “I felt like everything was discounted by 30%. This also applies to foreign tourists visiting Japan in the future. While Japanese people are having a hard time making ends meet due to the lack of wage increases and the rush to raise prices, foreigners are “bomb shopping” in Japan. Certainly, this is a welcome boost to Japan’s economy. However, it is not necessarily frustrating or empty when overseas travel becomes too expensive and difficult to go abroad, and when people enjoy Japan’s low prices to the fullest.

Local people must have watched with mixed feelings as Japanese people enjoyed themselves in emerging countries in the past. The day when the Japanese will be able to experience this very thing in Japan may be approaching.

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