We can’t tell you how many times we’ve heard that Tokyo is expensive. For that matter, people generalize and say Japan is expensive. However, the people that tell us things are expensive are the same people that sell something for $100 in the US and bring it across the seas to sell the same thing for $140 or $150 in Japan.
Across the board, what you buy at Amazon.com in the US is more expensive in Japan. Why are there cost differences?
1) If you are selling items in Japan that were not produced there, the supplier likely has to cover the costs of shipping and costs to the government. Leather goods, for example, have high tariffs when they come into Japan.
2) Transportation in Japan is more expensive. This is easy to see firsthand as you visit Tokyo and see elevated highways and other infrastructure that is paid for by nearly 50 percent taxes on gasoline.
3) Housing in Tokyo is more costly.
4) Salaries are higher to match the high cost of living.
5) Office rents in Tokyo are expensive. These costs are factored into the price of goods and services in country.
There are many other factors, however this chart from The Economist illustrates the cost of living in major cities around the world.
Statistics courtesy of The Economist
With the US dollar tanking in 2011, things have been exacerbated. Wise Japanese companies have taken advantage of the 20 percent discount fire sale on US dollar-based assets, products and services. Others have been hurt by increased costs for exporting their products overseas. At AINEO, we renewed all our domains for AINEO.com, net, org, tv and so on expecting the US dollar to rebound. We have yet to see the dollar get back to the 100 yen mark.
However, not everything is expensive in Japan or specifically in Tokyo, for that matter. If you can survive on burgers and fast food, you would be happy to buy a Big Mac in Tokyo.
