Sunday, February 08, 2009

Japan exchange rate is nuts!

I just looked into the exchange rate for USD to JPY and it's terrible. I am still potentially going to Japan and South Korea in December, but if the exchange rate it SO bad, it could have an effect on my trip and it might make more sense to delay it (or go somewhere different for this trip)?

Check this out:

So it's currently 1 USD = 92 Yen. This website talks about the "Purchasing Power Parity" which is basically what a currency "should" be so that prices would remain the same once you factor in the exchange rate. Anyhow it says that the PPP price of the Yen should make it so 1 USD = 120 Yen. I.e. you should be able to buy a lot more in that case. Therefore the USD is undervalued compared to the Yen, (the Yen is overvalued compared to the Dollar), and that's going to make a place that is already expensive even more expensive.

Anyway this is something to think about when planning my trip. It's only 3 weeks and hostels are going to be expensive, but still in the range of $50/night so it's not totally crazy. If it gets a lot worse or something, I could aim for somewhere else... after watching Slumdog Millionaire I would LOVE to go to India. Peru or Chile might be very interesting, and I've never been to South America. Or I could go back to New Zealand. Anyway just a couple ideas in case, but I'd like to stick with the plan to go to Japan and South Korea unless it's totally unaffordable.

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