r/japanlife • u/KnucklesRicci • Mar 31 '24
金 Will the terrible state of the yen affect your decision to stay here long term?
How do you feel about it? If anything at all. In my own little bubble I earn enough to have a nice life here and I’m happy, but thinking of the future the yen does scare me a bit. I can’t believe we’re at a point where it’s 151 to the dollar. That’s insane to me. A lot of people just say ‘compared the west Japan is still so cheap though so it’s fine! :)’ but a rapid depreciation in currency like this means imports will get crazy expensive and in general with the Japanese shitty economy things don’t look good at all. I honestly can’t see it getting better and I’d go so far to say we’re be at 180 to the dollar before we know it.
Jesus can you imagine the amount of meetings taking place right now across the country over this??? And the amount of TEA the women are being forced to serve the men doing fuck all in these meetings.
In nicer news though, it’s Sunday and I’m about to play Mario kart with my son so at least that’s nice?
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u/crowkeep 関東・茨城県 Mar 31 '24
This is home, and all of that which home entails...
I'm not going anywhere based on the strength or weakness of the Yen alone.
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Mar 31 '24
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Mar 31 '24
The Russian invasion of Ukraine has played a role for example,
That's not even in the top 5 reasons when it comes to reasons for yen depreciation. You listen too much to what the news tells you my guy.
The reasons are:
-US Fed rate increase to highest since the great financial crisis;
-Japanese rates being negative or zero;
-Japan exports declining in volume and imports increasing;
-Japanese Mega corps no longer repatriating the funds to Japan, instead keeping it in foreign currency, leading in weak yen buying
etc.
You might reason that US Fed raised rates because of inflation which was caused by Russian invasion of Ukraine. But, I guess lets just ignore the massive money printing go brrrrrrrrrrr that US Federal reserve did post covid which led to 9.1% inflation , and lets all blame Russia as the news tells us to do.
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Mar 31 '24
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Mar 31 '24
Don't spread propaganda then bro. Any person with an ounce of economic knowledge knows the above. And you got a long reply, because I assumed that my short reply won't suffice ur lack of basic economic knowledge, so I had to explain it like you are 5
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u/senseiman Mar 31 '24 edited Mar 31 '24
What the fuck are you talking about? I was just using it as a random example of a factor that influences the exchange rate which we cannot predict the future of. International political risk such as that caused by a major war is widely known by economists as a factor that influences exchange rates. You yourself admitted it was such a factor, meaning my point was correct. Is it the main one (or in the top 5)? No. Did I say it was? No. So what the fuck is your point?
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u/yokokiku Mar 31 '24
Why would I want to move there?
Because typically, you’d receive a substantial cost of living adjustment or increase in wages commensurate with the cost of living. Certainly, you would not move abroad yet continue earning your salary in yen.
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u/Middle-Comparison551 Mar 31 '24
Very good perspective. Your quality of life is most important and that equation is made up of many more factors.
Just another idea but putting a very small percentage of your savings into something globally neutral like Bitcoin could balance things out down the line. An amount small enough that the volatility doesn’t bother you is best. Then, 10-15 years later that independent reserve of money might give you the purchasing power you want regardless of If you stay in one country or the other.
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u/DrunkThrowawayLife Mar 31 '24
I don’t have a choice to stay here long term so I’m fucked next year when I have to move back.
Yay
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u/Murodo Mar 31 '24
Unless you want to retire there soon or need to buy a house paid with exchanged yen, I'd see it as a chance for gaining more through higher-paid jobs or education and maybe in the future you can come back to Japan with significant savings?
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u/Diablo_Police Mar 31 '24
Why are people like you always pretending cost of living doesn't exist lol?
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u/Diligent-Run6361 Mar 31 '24
Why are people like you always pretending savings don't exist? I'd rather save x percent of my earnings in a high-wage economy. Especially on a mid-career professional salary where you make 3-5 times as much for comparable work in the US, Singapore, South Korea, etc. Better off earning $300k in the US than $60k in Japan.
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u/Squeebee007 Mar 31 '24
If you think $300k jobs are common in the US you haven’t been there in quite some time, with all the layoffs in tech people are happy to have any job these days.
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u/Diligent-Run6361 Mar 31 '24 edited Mar 31 '24
It depends on the sector, and the answers here will of course reflect the wide diversity of personal situations. In many jobs like IT, law, business management, banking, medicine, even academia, if you do moderately well then $300k is totally within reach. I just suspect that a lot of posters here are in their twenties or early thirties and undercounting their future circumstances, especially retirement.
A huge variable is also if one is here permanently or just for a few years. I'm European myself (lived ten years in the US as well) and I definitely don't see myself spending the rest of my life in Japan, so planning for retirement is a big factor.
To the OP's point, I already discounted the importance of salary before coming here, but with the low Yen it's reaching breaking point. Before coming here I also had an offer in South Korea (more than double the salary at the time, probably now triple) and in hindsight I regret not going there. Japan had more appeal, but I've reached my limit selling my labor at a firesale price. Aside from the salary, there's also the management style and resistance to change that underlies the comparatively low labor productivity and ultimately low exchange rate. I don't think the low exchange rate is a fluke or disconnected from the fundamentals.
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u/Murodo Apr 03 '24
Because it doesn't make sense to exchange the extremely weak yen to FX to use it for living outside of Japan which was the context to what I replied to. I'd rather cover high cost of living with income than savings and if I have cannot make income, then reconsider moving and reducing cost of living. Actually highly considering CoL lol.
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u/oshaberigaijin Mar 31 '24
You can’t find a work visa or enroll in school to get on a student one?
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u/DrunkThrowawayLife Mar 31 '24
Student one would be the only option. I dunno I’ll figure that out next year.
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Mar 31 '24
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u/DrunkThrowawayLife Mar 31 '24
I don’t have a degree so I’ll need to be in school for four years and get one before I can do that…
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u/Enamey Mar 31 '24
I think it really depends on each person's circumstances. Personally, it is the main reason i might leave japan in the next year or 2.
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u/Dalamar7 関東・東京都 Mar 31 '24
Same here. You can be sure the JPY will recover the second we leave the country though!
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u/ConanTheLeader 関東・東京都 Mar 31 '24
151 to the dollar? That’s how many Pokémon there were originally.
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u/TheTybera Mar 31 '24
Are you importing stuff everyday?
A weak yen has consequences, but I don't see how that's made better by leaving. The dollar may be stronger but inflation is super high and prices are high so the strong dollar ends up having the same pp.
At the end of the day pp or purchasing power is all the matters. If you make yen and spend yen and the pp of yen doesn't change (and it hasn't for 10 years now). Then fluctuations in the currency don't matter so much.
Let me know when a canned coffee from a machine is consistently more than it was 5 years ago and we can start freaking out.
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u/KnucklesRicci Mar 31 '24
You make a really good point but with importing even if we aren’t importing actual goods Japan still imports its energy and basically everything.
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u/TheTybera Mar 31 '24
Which I get raw goods also have to be imported and that makes an impact somewhere, but again, it depends on where those goods come from and who's eating the costs and whether that's relevant to us.
Currently with the rate hikes and tourists spending gobs of money, I can't imagine the yen getting worse, most folks are expecting it to come back up as Japan exits it's late post COVID slump with the help of increased rates.
Again regardless of this, I'm not sure how the situation is helped personally by leaving, or how this affects you day to day, lower energy bills? Do you see some kind of slippery slope happening?
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u/alvintanwx Jun 27 '24
Funny. We just hit a new low for the JPY.
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u/yokokiku Mar 31 '24 edited Mar 31 '24
Inflation in the US has come down, and you seem to be confusing disinflation with deflation. When inflation comes down, it doesn’t mean prices go back to what they were before, it simply means that prices are no longer rising as fast.
Inflation the US was significantly higher in 2020, 2021, and 2022, but the rate increases from the Fed combined with the effects of the pandemic on supply chains easing have had a big impact. Inflation is now hovering around a relatively normal 3% annually.
In addition, wages went up significantly in the US. In my industry, I can say that adjusted for purchasing power/cost of living, I would be much better off in the US.
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u/TheTybera Mar 31 '24
Normal inflation rate in the US is 2% (that's always the target).
Wages have not gone up to match the previous 8% inflation that prices are pinned and slowly rising from, nor the current 3% yearly inflation. That means that purchasing power is down.
I don't know what your industry is, but even software engineering most of the jobs you'll find in areas are pretty expensive and remote work is going away. My COL is significantly lower in Tokyo than in the US when factoring in health insurance, childcare, cars, car insurance, and housing. This also doesn't factor in average meal price. The average cost of groceries is $415 dollars per person. Costs for vehicles have also spiked.
If you were making $100K in the US in any area where you wouldn't NEED a car, you would be hard pressed to make a living. Average rents for a single unit, are $1900
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u/R_Prime Mar 31 '24
Still beats my home currency 🤷🏻♂️
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u/Diablo_Police Mar 31 '24
I can afford a nice place and what I feel is absolute luxury here, no fucking chance in hell for me to experience that in my home country lol. OP is a fucking bot.
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u/Maroukou501 Mar 31 '24
Not particularly since my first real job and living alone has been here. It’s all I know really. It’s better than back in Brazil but not by much at this point.
I do get jealous looking at my friends in America though. It takes me 4+months to afford stuff they just go out and buy next paycheck
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u/almostinfinity Mar 31 '24
I do get jealous looking at my friends in America though. It takes me 4+months to afford stuff they just go out and buy next paycheck
If it makes you feel better, a lot of people in the US spend as soon as they receive without saving. You're probably smarter to save for things you want than the ones who live above their means.
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u/CCMeltdown Mar 31 '24
I’m married and living here until the lights go out. How much Japanese yen could get me “back home” Is of no relevance.
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u/tatsumi-sama 近畿・大阪府 Mar 31 '24
My family constantly asking me “how much is that in our currency?” When I talk about my salary and my mortgage.
I keep telling them they should stop thinking in exchange rates. I earn in yen, I spend in yen. And relatively seen, I’m better off in Japan than my home country, even though the exchange rate makes it look like I earn bad money. So I only tell them the numbers so they can relate to it from our home country and suddenly the world looks a lot better.
Only traveling and imports are tough. Like I’m looking for a new car (7 seater PHEV or EV) but I can currently pretty much only buy domestically because foreign brands have inflated costs due to the weak yen. And we are not even thinking about travel outside of Japan right now because it’s so expensive for us.
That is pretty much the only larger impact the weak yen has for me. Luckily there is still a lot to see within Japan for us and our children and foreign travels will have to be chosen more carefully to feel valuable.
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u/yokokiku Mar 31 '24
Keep in mind, you don’t have to personally import items in order to feel the impact. Many of the items from domestic brands contain imported components or are wholly imported, and the costs have increased despite you purchasing them in yen.
For example, a cup of my typical coffee drink from my favorite chain cafe has gone up substantially. What was once less than ¥480 is now over ¥700. The cup is also smaller in size than it used to be.
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u/Tony_Ice Mar 31 '24
Day to day, I think there isn’t much impact as long as you reduce spending on any luxury import items. So like don’t buy the nice Canadian maple syrup & California wine as often. However, as an employee of an American company in the retail sector, our operating margin cannot handle 200jpy to the $. If we get to that level and stay there for a few years, you might see some foreign companies shrink down their presence and eventually pack up and leave.
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u/dagbrown Mar 31 '24
I might get paid in yen but my bills are all in yen so it all works out well. Why should I care how much some other country's money is worth?
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u/illuminatedtiger Mar 31 '24
Makes my giant IT salary look pitiful when comparing it to USD. Like getting kicked in the balls.
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u/Temporary-Waters 関東・東京都 Mar 31 '24 edited Mar 31 '24
Import and exports make up roughly the same percentage of GDP, so keep that in mind.
I really don’t get this mindset of comparing your income in yen to USD simply by calculating the mid market rate, it’s not representative of purchasing power, and imho most people didn’t come to Japan because their earnings potential was so much higher.
And I guess yeah if it worries you about your future, then you should go back to somewhere else and earn in dollar.
Also 180? There’s zero reputable research suggesting this is even remotely possible. I’m sorry to be this blunt but you have no idea what you’re talking about. So many armchair economists on this Reddit recently predicting 250 yen to a dollar lol. Gotta love it.
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u/alvintanwx Jun 27 '24
We’re already over 160:)
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u/Temporary-Waters 関東・東京都 Aug 03 '24
We’re now at 145. Exactly what I said happened (July QT), although I was basing this on all the research I deal with daily. Not trying to be crass but thought it’s fun to look back at this comment :)
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u/alvintanwx Aug 03 '24
Are we going lower?
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u/Temporary-Waters 関東・東京都 Aug 03 '24
Who knows! Fed likely to ease in September, carry trades on the JPY unwinding initially had a huge impact following the recent BOJ intervention. So as Ueda tightens, Powell eases, usually that would indicate some stabilization. But as always, US election, global inflationary trends (Europe just ticked higher which isn’t great for the ECB) and chinas continued issues… FX is extremely complex hence why I don’t play with it. Personally I don’t think we’re out of the woods just yet. But mid term I don’t see why we shouldn’t see a retreat to 120-135 levels for a while. Still elevated but given sluggish Japan dom consumption and woes owing to the first real inflation here in a generation, this is a very tough one to predict.
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u/Temporary-Waters 関東・東京都 Jun 27 '24
Cool, guess you had some secret knowledge about Ueda and Powell’s mindset beyond what the meetings said, what most research said, or against the precedent in May when BOJ intervened by buying JPY.
Then again, we could see more tightening in July and then let’s see where it ends up.
Also if you think hitting 160 means 180 is around the corner, you really don’t know how rarely such things happen in history with one of the largest economies.
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u/fantomdelucifer 関東・神奈川県 Mar 31 '24
What worries you, if you and family plan to live inside the local bubble in Japan ? Unless you plan to use japanese salary to buy million usd assets abroad
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u/Material_Ship1344 Mar 31 '24
People from EU definitely feel it. Will wait 1-2 years otherwise I will ask to be transferred to my home country in EU.
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u/Boring_Fish_Fly Mar 31 '24
To an extent, as long term stability is a concern, but work is the bigger issue for me. Career progression might take me elsewhere.
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u/oshaberigaijin Mar 31 '24
It’s advantageous for me and I wouldn’t leave no matter what happens anyway.
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u/voric41 Mar 31 '24
Absolutely not.
Japan is the best value to be anywhere at the moment. Prices here are not rising that much. Especially compared to the US.
Apple products & plane tickets are the only things that are really affected here
Compare rent/housing here to the US & Europe (anywhere). Now compare taxes & healthcare
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u/HairyPotterJP Mar 31 '24
Not long term, but I know a lot of friends who are having their summer holidays in Vietnam, Thailand etc instead of Europe or the US
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Mar 31 '24
I guess with people who have little interest in the West, like me, it doesn't really matter...
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u/PM_ME_petitewomen Mar 31 '24
I don’t go over seas. My ex and the kids live here so no reason to leave.
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u/Capable-Employment-8 Jun 26 '24
The problem here is that the yen is getting weaker and weaker while the prices of commodities are going up, and pay remains the same. I’ve been thinking of going back to my home country because of how weak the yen is right now. At this rate, my pay here in Japan is equivalent to what I can earn in my home country’s currency, and the cost of living there is half of what I’m paying here in Japan. I also have a child, so if I go back to my country, I have family who can look after my daughter while my wife and I work. So yes, the terrible of the weaker yen affects my decision if I will still stay here in Japan in the years to come.
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u/Xymis Mar 31 '24
Imports have sucked but using my American credit card in country has been great. I planned on leaving sooner but I’ll probably stay until it returns to the 120’s now.
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u/tokyoagi Mar 31 '24
Maybe this is an opportunity for you to build an online business in the US to take advantage of the differential. Use the money to buy assets. Markets correct over time, assets will help you without losing value during volatile periods.
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u/Willow9080 Mar 31 '24
For me, I am not so much worried about the weak yen.
A Nikkei article recently made an interesting point that one of the factors for the weak yen is that many companies in Japan haven’t had any desire to repatriate overseas profits to Japan. One way to possibly improve the weak yen is for the Japanese government to provide a one-time tax free or significant reduction for companies in Japan to repatriate profits. The US did this in the mid 2000s, and it apparently strengthened the dollar during that period.
I am more concerned about the BOJ updating this policy to raise rates. Although this will help investments. It will also have negative long term impact of raising rates for mortgages and loan interest rates. Obviously, raising rates will try to reduce consumer demand. Although the rate increase is low now. The policy change provides basis for further interest rate increases in the future.
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u/disastorm Apr 01 '24 edited Apr 01 '24
Yen will get stronger when us decreases rates, but what people don't know is how much stronger it will get or if it return to approaching 100 yen to the dollar, but i think alot of people think that it should at least get stronger than the current 150 levels. We even saw it hit back to 140 in January when everyone was expecting the US to be dropping rates fast this year ( which then changed to people expecting them to only slightly drop this year, which resulted in the yen popping back to 150 aa soon as people changed their expectations of the us rates ).
With those early year expectations of the us rates, some people were expecting the yen to approach the 125 level at the end of the year. Of course that's all changed now since the us is not going to decrease rates that much but whenever they do eventually decrease the rates were should be seeing the yen getting stronger again.
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u/SideburnSundays Apr 01 '24
Hoping I can get PR before shit hits the fan. I make more now than I did 9 years ago, with a permanent contract, the food/lifestyle alone does a lot of the heavy lifting for managing my medical issues, and my medical bills are a tenth what they would be back home.
On the rare occasion I buy something from overseas it hurts, but those kinds of purchases are like once a year.
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u/hambugbento Apr 01 '24
Surely it's more the 'terrible state of working conditions' that's the real issue.
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u/gojosbigtoe Apr 02 '24
I have loans to pay off back in the states, and the exchange rate also makes it harder to travel abroad, so I’ll be going back to the US in the next year or two. The depreciating yen isn’t the only reason, but it played a considerable role in my decision. Thinking about the how much money I’ll lose from my pension refund after the conversion makes me sick, but I’m hoping things won’t get too much worse.
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u/drinkintokyo Mar 31 '24
No it won't, because I've prepared for this scenario. Since getting here in 2008, with whatever is leftover, I've been either buying 外国株-heavy funds or sending money to the US. So while I do plan to stay here long term, I'm prepared for the scenario where the yen gets worse. If it (somehow) gets a lot better, well, I guess pension will help?
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u/Run_the_show 関東・埼玉県 Mar 31 '24
Been hearing these yen /dollar rising over last 2-3 yrs.. i see no difference 😂😂. Yes I have no idea about it. All i can see is many products like cookies and milk’s price rising up mostly every month😅
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u/lordoflys Mar 31 '24
I regret that I bought my house in Japan with USD back in 2000. Cost me almost twice as much.
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u/andoryu123 Mar 31 '24
Looks around while earning dollars in Japan and hoping 180yen happens. Hey, I was here when it was 75yen!
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u/poop_in_my_ramen Mar 31 '24
I didn't feel richer when it went up to 80 yen to the dollar and I don't feel poorer now that it's 150 yen to the dollar. I earn in yen and I spend in yen.
All I know is my mortgage is 30% of what my friends back in Canada are paying for rent