"Mom, Now's the Time" Exchanged 100,000 Won at a Time... Japan Travel Demand Surges as Yen Drops to 850-Won Range

Exchanging Travel Funds in Advance as Exchange Rate Plunges
Significant Increase in Individual "Yen Tech" Demand

"I've been exchanging 100,000 won worth of yen at a time ever since it hit the 880-won range, and since the yen kept dropping, I ended up booking a plane ticket. It's so cheap that this time, I'm planning to take my parents with me for a family trip."

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As the KRW/JPY exchange rate slipped to the 850-won range per 100 yen, demand for travel to Japan has been rebounding sharply. The sentiment of "buy low, stock up" is growing, with people who exchanged in advance now making sudden travel plans.

Yen Breaks into 850-Won Range ... Japan Travel Heats Up Again

In the Seoul foreign exchange market, the KRW/JPY exchange rate dropped to as low as 854 won during the day, hitting its lowest point since November 2023. This is a decline of more than 12% compared to the local peak just three months ago. Compared to the past, when the rate typically fluctuated in the upper 900-won to around 1,000-won range, the drop is significant.

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The drop in exchange rates is quite noticeable. Just until mid-year, it cost about 970,000 won to exchange 100,000 yen, but now 850,000 won is enough. With a simple exchange rate difference saving them 120,000 won, many who originally planned solo trips are now scaling up to family vacations. In fact, according to recent SkyScanner statistics, some low-cost carriers are offering one-way tickets to Japan for as low as 110,000 won, meaning the money saved from exchanging in advance can basically cover the cost of a ticket.

Netizens are sharing information related to traveling to Japan on social media. Thread capture

This surge in popularity is also reflected in the inflow of yen deposits. As of August 25, the combined yen deposit balance at the five major banks — KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup Bank — stood at 1.3456 trillion yen. This is an increase of 306.8 billion yen (29.5%) in just one month from the 1.0388 trillion yen at the end of July. It also breaks the previous all-time high of 1.2705 trillion yen recorded in June 2024, marking the largest ever, which, when simply converted at the end-of-month exchange rate, amounts to about 11.5 trillion won.

"Exchange Now, Even Without Travel Plans" Becomes the Trend

Recent posts with the hashtag #Enjeo (Instagram captures).

Both the strength of the won and the weakness of the yen have contributed to the KRW/JPY exchange rate decline. In particular, the yen has once again weakened against the dollar, pushing down the rate. Additionally, increased dollar selling by exporters and forward yen selling by shipbuilders have also been cited as reasons.

As a result, even people without immediate travel plans are jumping into the so-called "Yen Tech" by accumulating undervalued yen in anticipation of future profits. There is also advice to adopt a dollar-cost averaging strategy, rather than investing a large sum at once during times of high exchange rate volatility, to reduce risk.

However, whether the weak yen will continue remains uncertain, as there is a growing likelihood that the Bank of Japan will hike interest rates again. U.S. Treasury Secretary Scott Bessent said in a CNBC interview on July 31, "I believe the Japanese government and the Bank of Japan (BOJ) will take actions that strengthen the yen."

How Can You Successfully Exchange for Travel Expenses? Tips for 'Yen Tech'

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Meanwhile, market factors should be carefully considered when exchanging travel funds. Since July, the Japanese government has tripled the departure tax from 1,000 yen to 3,000 yen. For a family of four traveling to Japan, the departure tax alone amounts to 12,000 yen (about 100,000 won). The proliferation of "dual pricing," where locals and foreigners are charged differently at major tourist sites, is another factor to keep in mind while budgeting.

Experts say, "The simplest way for an ordinary investor to profit from currency fluctuations is to purchase yen using a bank app or foreign currency account." No separate taxes are levied on profits from ordinary currency exchange.

There are also caveats when engaging in Yen Tech. Financial industry insiders caution, "You must be mindful of the spread — the difference in rates when buying versus selling currency. If the exchange rate rises only slightly, any profit may be erased by the cost of exchange. It's also difficult to say with certainty that the current rate is the bottom."

This content was produced with the assistance of AI translation services.