Saturday, September 24, 2011

If I exchanged American currency for Japanese currency would I have more or less money on Japan?

Question:


I'm not quite sure if their money is stronger than American money or not.
I'd like to start saving up for a trip to Japan and I need to know if I need to save up extra money or not.

Answer:


The main unit of money, the US dollar has always been stronger than the yen - about 76 yen to the dollar right now. But it's not a question of which currency is "stronger" - it's a question of which currency is appreciating - and lately the power of the yen has been getting extremely high - close to if not the highest value ever. Twenty years ago it was about 120 yen to the dollar; 26 years ago it was about 250 yen per dollar, and more than 30 years ago it was about 360 to the dollar. Which makes everything much more expensive for you going to Japan. The more the dollar sinks the fewer yen it will buy.
Nobody knows the future; but with Americans still shoveling hundreds of billions of dollars to China and Japan to service their debt, and no real control of the spending and deficit, it's unlikely to get better for you anytime in the near future.

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