# Japanese YEN depreciation



## qwertyking123

Hi all,

First time poster :clap2:

I've recently signed an expat deal to Tokyo. The salary was set in YEN.

Over the past months, the JPY has weakened significantly against the USD (about 20%). Coming from the US, this greatly affects my spending/saving ability abroad and at home. 

Has anyone else been similarly affected? And if so, any success in re-evaluating your salary component? How were you able to present the case to successful influence your salary?

Any replies would be appreciated!


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## larabell

I've heard of adjustments being part of an expat arrangement when the employee is bring paid in US dollars. Since you're going to be living over here, your employer probably assumes the bulk of your expenses will be in yen... same as your salary. If that's not the case for you, I would raise the issue with your employer and see if you could get some kind of adjustment. But I assume they're paying you in yen in order to avoid having to deal with fluctuating exchange rates (if I were negotiating a deal right now, given the current political climate, I might have preferred to be paid in US dollars).

I've been here a while so almost all my spending and savings is in yen... which means the exchange rate is largely moot for me. But I have some investments in the States which I would love to sell so the recently-weakened yen is actually working in my favor.

BTW... if you negotiate for regular adjustments, it's almost certain it will work both ways. I'm not too worried about the yen getting any stronger than it has been in the last few years but if that did happen, you could find your salary being adjusted downward. Be careful what you ask for because you just might get it .


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## qwertyking123

Thanks for the reply!

Currency fluctuation protection is something I overlooked while negotiating the deal. The JPY is quite volatile up against the USD, and trying to implement post-signing adjustments are difficult. 

I suppose its second-nature to mentally convert your salary from your host country to home country. With that being said, it is true to assume that most expats will make a large portion of their expenditures in the host country, so only a portion of the the salary should be adjusted up or down. 

The plan wouldn't be to try to be a currency trader, but to negotiate a fair arrangement that reflects the market, regardless if that means that the exchange rate goes up or down 

What sucks for me is that I've signed at a level when the JPY was close to its 10-year-high to the USD. So its likely to be just downhill from here, especially with Abe and his monetary easing.

Thanks again for the reply!


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## CalParr

I moved to Kyoto this January on a post doctoral fellowship but only for a year so I intend to transfer my bursary back to the UK afterwards. 

Originally when I applied back in early 2012 I was doing currency conversion and was amazed at how much this society was going to pay me.

Then I moved to Japan a year later and realised how expensive everything is and now the yen is depreciating like there is no tomorrow. 

What bank are you with? Citibank in addition to a yen savings account also offer a multi currency savings account. I am considering whether to exchange the yen I have so far over 3 months to pound stirling or US dollars. However I wonder if the worst has already happened and if it is worth doing this. Also there is usually a fee for such exchanges so it gets quite complicated to weight the cost of this administration fee versus the potential loss you might have if you don't do it. 

I think the stimulus is great for Japan's economy and also in particular science which is getting of the stimulus money in research funding but in my specific example as I am only here for a year it's a bit of downer.

I wonder if there are ways to get round this i.e investing yen in something else. I am not very financial savvy.


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## larabell

CalParr said:


> However I wonder if the worst has already happened and if it is worth doing this.


Gee... If I knew the answer to that question, one of my seven secretaries would be answering this instead of me .

I think "depreciating like there is no tomorrow" is a bit of an exaggeration. Until Abe came along, the yen was fairly stable in the 75~80 range and when Abe's party was handed the majority it popped up maybe 15% and has stayed there ever since. It was an unfortunate one-time blow to anyone who held yen hoping to convert them into dollars later but we're hardly seeing the runaway inflation some predicted.

Before Abe, I figured we'd see 50 Y/$ before we saw 150. Now I'm not so sure. The articles I've read all seem to doubt Abe's plan will have much of a long-term impact and, of course, a lot depends on the US economy as well. If the US Congress can't find their heads and Abe's amazing recovery plan doesn't get consumers to start spending more of their money, the yen isn't likely to go anywhere and may even start to rise again.

Anything that you invest in with the intention of reselling it to get your money back will have a fee associated with the transaction -- if not explicitly then hidden in the difference between the buy and sell prices (as would be the case with gold coins, for example). It's been my experience that moving money between currencies with the intention of making a killing hardly ever works -- at least not for us peons who don't have insider information. What little you may gain through dumb luck will be eaten up by the fees. Put the money where you plan to use it, do it once, and do it at a time when it's convenient for you. If you're not planning on using the money right away, invest it in something (stocks, real estate, whatever) and don't worry about the exchange rate. If you pick the right investment, it will hold it's value no matter what the yen and dollar do in the meantime and when you sell you can change the money into whatever currency you need at the time. You'll never be able to second-guess the currency markets so I wouldn't lose too much sleep over short-term fluctuations (and in the big picture, a year is still short-term).

As for banks... I use Citibank to transfer money between the US and Japan. I have a Multi-money account but I don't speculate in exchange rates. They're expensive but convenient. I've heard of people buying postal money orders and sending them overseas as a cheaper way of moving money and the rates are probably closer to the spot market.

One thing you may want to take into account is the dismal interest rate you get in Japan. I don't know what the rates are like in the UK but moving your money over sooner rather than later may make enough of a difference in interest to make up for any subsequent movement in the exchange rates. And... who knows... if Abe's plan isn't enough to counter the upward pressure on the yen that's kept it so high for so long, you might come out on the plus side there, too.


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## gestalt

I'm in a similar situation to qwerty and I agree/hope for the most part that the buying power will remain relatively the same in-country.

However, I have started to see costs for imported goods go up to match the depreciation levels and a few restaurants have posted % increase to their menu prices since they use materials (produce, meat, etc.) flown in from other countries. 
Should also keep in mind EUR, RMB, and AUD are also appreciating against the JPY.

Curious to see the potential impacts from FX when the next iPhone comes out in Japan and if there is a variance compared to the current pricing structure.


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