The yen just clawed back 5% from its 40-year low — is Japan still cheap?

The yen just did something it hasn't done since before Lunar New Year: it climbed to a seven-month high against the US dollar. On 7 September it strengthened to ¥154.36, up more than 3% over the past month, as markets priced in near-certain odds of a Bank of Japan rate rise to 1.25% at the BOJ's 17–18 September meeting. For Hong Kong travellers who've spent all year hearing "the yen is the cheapest it's been in 40 years," this is the first real crack in that story — and it's worth putting an actual number on what it costs you.

The rebound, in numbers

Back in early July, the yen hit ¥162.84 to the US dollar — its weakest level since 1986, and the backdrop for a run of "Japan is a 40-year bargain" headlines, this one included. Since then, Tokyo and Washington have leaned on the currency hard: a coordinated intervention campaign spent roughly $99 billion between 30 July and 26 August, driving the single largest monthly drop in Japan's foreign reserves on record — $79.6 billion in August alone. Layer on this week's rate-hike chatter from BOJ governor Kazuo Ueda and board member Hajime Takata, and the yen has now clawed back about 5.2% from its trough. It's still a weak currency by any decade-scale measure. It is no longer this year's weakest.

What it costs you in Hong Kong dollars

With the Hong Kong dollar pegged near HK$7.84 to the US dollar, that swing runs straight through to your travel budget. At July's low, HK$1 bought roughly 20.77 yen; at Wednesday's rate, it buys about 19.69 — 5.2% less. Put it against real spending: ¥100,000 of on-the-ground costs for a week — hotel, rail, meals — ran about HK$4,814 in early July. The same ¥100,000 now costs roughly HK$5,079. That's HK$265 more for identical spending, not because anything in Japan got pricier, but purely because the currency moved.

Still cheaper than it's been in years

Zoom out past this year's swings and the picture looks different. In 2019, before the yen's long slide, the dollar bought around ¥109 — putting HKD/JPY near 13.9. Even after this rebound, today's HK$1-buys-19.69-yen rate means a Hong Kong dollar still stretches about 42% further in Japan than it did seven years ago. The multi-decade discount hasn't disappeared; it's shrunk from "unprecedented" to merely "very good." That's the honest read: the yen went from a 40-year low to a 7-month high in nine weeks, and Japan is still, by any pre-2022 standard, a bargain.

What happens next

The BOJ's 17–18 September decision is the next real trigger. Markets have already priced most of a hike into today's rate, so a confirmed move may not shift the yen much further — but a surprise hold, or hawkish guidance beyond it, could push the currency stronger still. If you're booking a Japan trip for this autumn, the practical move is to lock in what you can now: prepay hotels and rail passes at today's rate, or convert cash ahead of the meeting rather than after. See exactly where Japan sits against its own decades of currency history on its destination page, and for how we weigh currency swings into the real-feel number, our methodology lays it out. The window hasn't closed — it's just 5% narrower than it was in July.