TOKYO, July 6 — For all the noise about Japan’s return as a global economic force, the salient point for most visitors right now is how far the yen has fallen. The weaker yen has made almost everything in Japan appear inexpensive to foreign tourists and investors, fueling a surge in arrivals and a notable uptick in purchases of Japanese assets. The phenomenon has been dubbed “Cheap Japan,” a label that would have seemed absurd in the 1980s, when the country was viewed as an unstoppable economic juggernaut.
In 2025, Japan’s national mood was lifted by the gold medal won by figure skating pair Riku Miura and Ryuichi Kihara—known affectionately as RikuRyu—along with growing excitement over the upcoming soccer World Cup. Yet beneath these cultural triumphs, the economic narrative has been dominated by the yen’s steady decline.
It would seem the currency’s slide is reshaping the country’s image abroad. For decades after the bubble economy burst, Japan was seen as expensive and insular. Now, the arithmetic has flipped.
A meal in Tokyo, a hotel in Kyoto, a train pass for the bullet network—all cost foreign visitors significantly less in their home currencies than they did just a few years ago. The result has been a steady stream of inbound tourists, many of whom are spending freely on everything from electronics to luxury goods.
Real estate investors, too, have taken notice. The combination of low interest rates and a cheap yen has made Japanese property look like a bargain compared with markets in the United States or Europe. For all the excitement, the “Cheap Japan” label carries a double edge.
It is a boon for tourism and foreign investment, but it also reflects a deeper economic malaise. The yen’s weakness has squeezed domestic consumers, who face higher import prices for food, fuel, and raw materials. Wages have not kept pace, leaving many Japanese households feeling the pinch even as the country’s ski slopes and temples fill with camera-toting visitors.
The contrast with the 1980s could not be starker. Then, Japanese firms were buying Rockefeller Center and the yen was so strong that a holiday abroad was a luxury few could afford.
Now, the roles have reversed. What to watch next: whether the Bank of Japan will move to stem the yen’s slide, and whether the tourism boom can sustain itself without triggering a backlash from locals over overcrowding. For now, the world is taking advantage of a bargain—and Japan is, somewhat reluctantly, the host.
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