How Low Can We Go Edition
Seems the question on everyone’s mind is how low is the yen going to go, and how long is it going to remain weak? Sadly no one knows.
It’s 128 yen to the dollar as I write this.
Personally I am hoping for the yen to strengthen, as I am still buying world stock index funds regularly. With a stronger yen, these are better value, but I will continue buying anyway. There is a chance the yen will be even weaker in the future (hope not, but the world doesn’t really care about my hopes) so the safest thing is probably to stick to the plan and keep plodding on towards the goal.
Speaking of goals, today I had a look at my annual plan for this year. I honestly cannot remember writing most of it.
Good job I checked, or I would have no chance of reaching any of them!
The Forum
The Forum is doing well (20,581 posts so far). Here are the latest active threads:
This week’s books
Got through two Reacher books this week: Personal and Make Me. Both pretty good. Four to go.
Also started A Professional’s Guide to Ending Violence Quickly, which kind of ties in to the Reacher thing I guess 😉
This week’s links
- Really interesting data on dual nationality in Japan: A “don’t ask, don’t tell” policy leaves many in the dark
- I used to paint Games Workshop figures (and play Warhammer, 40k, and Epic): Plastic (and payments) in the fantasy supply chain
- Interesting to think about as we creep into retirement and I spend more time at home. My wife and I were talking about how much better our 27-year old bathroom feels than new ones do now: Patina and Intimacy
- Lovely essay from Craig Mod: The Life of One Den
- This TED interview is fascinating (video): Elon Musk: A future worth getting excited about
- Bit of a detour, but I am fascinated by geothermal energy (video): Why don’t we all just use Geothermal Energy?
- Who are you meant to be? Shadow Careers and Unembracing Failure
- I enjoyed The Tao of Bill Murray a couple of months ago: Complicated Geniuses
- I think I get this right at least. I try to remind myself to treat other people the way I treat my grandkids: Who Gets Your Patience?
- Something to think about (bananas really aren’t yellow): The Myth of Three Meals a Day
- Some encouraging data: Few Financial Worries or None at All for 64% of Japanese Aged 60 and Over
- I enjoy walking, but perhaps not this much: THE 10 LESSONS I LEARNED WALKING 10,000 KILOMETRES IN 2021’S PANDEMIC YEAR
- This headline should be Dollar at… but the contents are still interesting: Yen At ¥128.6
- Always an interesting read: CWS Market Review – April 19, 2022
- More on this from Smart Money Asia: The Weak Yen Dilemma
- Some cheap places to live (although I think Japan is pretty cheap now too): Nothing saved? You can retire here for $1,500 a month
What do you think? Anything interesting in there?
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In 1973 the exchange rate was 1000 Yen to £1.
In late 1981 when I ordered my first Yen it was 480 Yen to £1.
A week later when I received my cash, it was 400 Yen to £1.
3 years later when I returned to the UK, it was 250 Yen to £1.
The exchange rate was then static for about 10 years before the Yen strengthened.
In Spring 1994 when I returned to Japan after a 10 year absence the rate was only 120 Yen to £1. That was an expensive trip.
In Spring 2007 it was 240 Yen to £1. Much better.
Was planning to return in the near future, buy an akiya, and DIY it myself. But if the Yen continues to weaken perhaps I can just buy a new build. Either way the wife will be happy.
95% of us who read frequent this site get paid in yen. We have to pay the bills in said yen, and are actually quite concerned about not only our retirement but the fact that daily living costs are skyrocketing right before our eyes, while many of us hadn’t had a raise in 10 years that is worth mentioning.
@Rob, My understanding is that the average TEFL wage in Japan is 250,00 Yen per month. Which was my last wage in 1984. Looks like no pay rises for 38 years!
BTW, thank you for your reply. It was not my intention to upset you or anyone else. FYI, my wife’s pension is paid in Japan in Yen. So we both gain and lose with Enyasu.
@Ben, Brilliant website! How about your own YouTube channel? Passive income generator?
Thanks for the kind words! YouTube channel is on the plan, but I need to dig myself out of a work hole first ^-^
To go back on topic, and Rob’s original point:
1. It reminds us of one important principle: if you are going to retire ‘abroad’ (from where you work) exchange rate risk is always an issue. If you are split between whether it’s going to be here or there (say, UK or Japan) then you deal with that by holding half your assets/future incomes in each currency. This also means that you will not benefit from any favorable moves, however.
2. I am baffled by the claim that prices are “skyrocketing” in Japan. Can’t think what of. Gasoline, perhaps, but have you seen the price of that in the UK right now? And, for most of us, Japan provides an advantage in that cars are less necessary. Your mileage may vary here, of course. (Pun intended.) Commodity inflation can also be mitigated to some extent by substitution, unlike mortgage payments (see below.)
3. More specifically regarding prices, as the articles that were posted note, the exchange rate is moving because of differences in interest rates (US rising, Japan staying low.) Whilst this means the yen is weakening, it also means that those in Japan with mortgages will avoid the rising payments that will hit others elsewhere. Your dollars might be worth more yen, but you will be saving less of them if you are in the US. The rising strength of the dollar against the yen is not going to much mitigate the inflationary pressures in the US or UK. So, in the US or UK you will have rising mortgage payments on top of regular inflation.
4. Your first home is not an investment. Even if it skyrockets in value, you are not better off, as all comparable homes will be more expensive as well and you have to live somewhere. I will take more affordable housing paid for by money borrowed at much lower rates than ‘asset’ inflation, thank you very much.
Prices: Energy costs are up, but I’m not sure I’d use the term skyrocketing. We first started seeing that earlier, maybe about January (our utilities are electric, city gas, kerosene, and water–and that last hasn’t budged). Prices at the gas pump are higher, but I only buy ~¥3000 worth every 4-5 weeks. So not much effect.
Produce prices vary seasonally, and it’s hard to see that there’s been any sustained changes, so I’d call that a wash. Milk is the same as always. It’s been several years, but yoghurt package sizes ‘shrinkflated’, dropping 50g/pack once or twice with the price unchanged. The meat we get has not changed much, but recently some fish is a little more dear–but then other fish is unchanged (saba fillets have been the same price for years).
Not directly related, but most phone costs have trended down, compared to a few years ago. Cheaper overall and also more GB.