When I first arrived on Okinawa in February of 1972, the island belonged to the United States and all business was transacted in dollars. That changed three-and-a-half months later when the United States returned the small island to the control of Japan. (May 15, 1972 - Reversion Day) Suddenly all local business was conducted in the Japanese currency, yen.
At that time the exchange rate was either 300 or 360 yen to the dollar (can't remember exactly, the mind fogs over the years), and it seemed like yen was so plentiful that people carried it by the bagful. Rent wasn't too outrageous. We took our dollars to the bank and converted them to yen in order to pay the local landlords. But then one day not too far into this story, Evil Dick Nixon took measures to lower the value of the dollar, and the result was that we could buy half the amount of yen per dollar that we had been able to previously, and our rent was essentially doubled. The landlords didn't make any more, but we certainly paid more!
The reason Nixon wanted to lower the value of the dollar was so that American manufactured goods would become lower in price for foreign currencies and other countries would rush in to snap up the bargains. It was to help our export trade - and to lower the American reliance on imports - particularly items manufactured in Japan.
When I arrived back on Okinawa a year ago last month, yen was trading at 87 to the dollar and rents were astronomical. That rate held fairly steady until the great Japanese tsunami on March 11th of this year. At that time many Japanese investors started taking their yen out of foreign investments and bringing it home to help with the rebuilding. The net effect was that the price of yen began to rise on the world markets while other currencies headed south - especially the dollar.
Today yen is selling at 75 to the dollar.
Today a hundred dollars will buy 7,500 yen. A year ago the same amount of dollars would buy 8,700 yen. Average rents are 200,000 to 300,000 yen per month. Go figure.
Japan is now cursed by other countries not wanting their exports due to the world currency rates, and the country is trying desperately to at least stop the surge in the value of yen. Today they announced that for the third time since March they will make a run at weakening their currency.
It sounds sort of oxymoronish that a weak currency would strengthen an economy, but a weak currency means more exports and thus more industry paychecks at home, and it also means more tourists coming to Japan and spending in the local economies.
And it also means that Americans who live here might be able to go out to the local establishments to shop and dine, rather that spend all of their time looking for cheaper housing and shopping on base or online.