1 of 3 | Foreign visitors dine at an outdoor izakaya in Tokyo’s Shimbashi district. The weak yen has made Japan cheaper for tourists while raising import costs for Japanese households. Photo by Asia Today
July 3 (Asia Today) -- Japan has become an increasingly affordable destination for foreign visitors, but the weaker yen has sharply reduced the ability of Japanese households and businesses to buy goods and services from abroad.
The yen's real effective exchange rate, a broad measure of its inflation-adjusted value against the currencies of Japan's trading partners, fell to 65.93 in May, The Yomiuri Shimbun reported Friday.
That was less than half the 141.77 recorded in December 1986, when the nominal dollar-yen exchange rate was near levels recently seen in foreign-exchange markets.
The comparison indicates that even when the dollar-yen rate appears similar to its level 40 years ago, the yen's actual external purchasing power is substantially weaker.
