2019/07/05(Source: FCオーナーズ運営事務局)
The yen appreciated around Golden Week, so those who traveled abroad may have been able to enjoy their trips at a slightly lower cost. Conversely, some tourists visiting from overseas may have regretted not exchanging their currency earlier.
While the appreciation or depreciation of the yen often doesn't significantly affect daily life unless you think deeply about it (apart from travel), it does create a noticeable trend in the larger context.
So, what is the relationship between a strong and weak yen for us consumers?
First, a strong yen offers many advantages for consumers. Foreign goods become cheaper, and as mentioned earlier, overseas travel becomes more affordable. However, this increases the desire to purchase foreign goods, leading to decreased sales of domestic products and ultimately lowering overall prices. This is even more beneficial for consumers. Furthermore, raw materials for producing goods can be imported at a lower cost, further contributing to lower prices.
What are the disadvantages of a strong yen?
The most immediate disadvantage for consumers is foreign currency deposits. Foreign currency deposits offer a higher potential return on investment than yen deposits, but naturally, if the yen strengthens, foreign currencies weaken, meaning their value decreases. Therefore, even if you receive interest on your deposit, if the value of the deposit itself decreases due to a stronger yen, you ultimately gain nothing.
From a purely consumer perspective, the advantages outweigh the disadvantages.
From the perspective of self-employed individuals, a strong yen means increased consumer purchasing power, but consumers tend to favor overseas products. This means that industries primarily dealing in domestic goods may face some difficulties. Furthermore, franchisees cannot independently change product prices, making them highly susceptible to economic fluctuations depending on their industry.
Next time, we will discuss a weaker yen.
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