Jan 22 (Nikkei) - A measure of the yen's strength has fallen to almost its lowest level in half a century as a combination of currency weakness and stagnant prices saps its purchasing power.
The real effective exchange rate fell to 68.07 in December, according to data released Thursday by the Bank for International Settlements. The yen last hovered at such lows in 1972.
While the Bank of Japan maintains that a weak yen benefits the Japanese economy, the erosion of the yen's buying power threatens to raise the cost of imported goods for consumers.
This index is not an actual exchange rate but is instead based on a weighted basket of currencies, adjusted for inflation. A higher value means that a currency can buy more overseas.
With inflation having quickened in the U.S. and many other big economies last year, prices in Japan are struggling to catch up.
A comparison of Japanese and American prices shows how far behind the curve Japan is. Netflix's premium plan is priced at 1,980 yen a month in Japan and $19.99, or about 2,300 yen, in the U.S. Nintendo's top-of-the-line Switch game system is 37,980 yen in Japan, compared with $349.99, or just over 40,000 yen, in America. Ippudo's signature "Shiromaru Classic" pork-broth ramen costs 790 yen, or $6.90, in Japan but $18 in the U.S.
