"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 had been exchanging 100,000 yen at a time since the 880-won range, but as the yen kept falling, I ended up booking a flight. It's so cheap now that this time I'm planning a family trip and will take my parents along."

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As the KRW-JPY exchange rate has slipped to the 850-won range per 100 yen, demand for travel to Japan is sharply rebounding. With the sentiment of "buy when it's cheap" on the rise, people who had exchanged yen in advance are now spontaneously making travel plans.

Yen Slips to 850-Won Range...Travel to Japan Heats Up Again

In the Seoul foreign exchange market, the KRW-JPY rate dropped to the 854-won level during trading, marking the lowest point since November 2023. This represents a decline of more than 12% compared to the peak just three months ago. Compared to the past, when the rate typically hovered in the mid- to upper-900 won range or around 1,000 won, this is a significant drop.

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The impact of the exchange rate drop is substantial. Even until mid-year, exchanging 100,000 yen required about 970,000 won, but now 850,000 won is enough. As people are able to save 120,000 won just from the exchange difference, those who initially planned solo trips are now expanding their plans to family vacations. According to recent Skyscanner data, some low-cost carriers have offered promotional one-way fares to Japan in the 110,000 won range, so the money saved on currency exchange alone can almost cover the cost of a flight ticket.

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

This popularity is also reflected in the inflow of yen deposits. As of the 25th of last month, the balance of yen deposits at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—stood at 1,345.6 billion yen. This is an increase of 306.8 billion yen (29.5%) in just one month from 1,038.8 billion yen at the end of July. It surpasses the previous all-time high of 1,270.5 billion yen in June 2024, making it the largest ever. Applying the exchange rate at the end of last month, this amounts to approximately 11.5 trillion won.

Even Without Travel Plans, "Just in Case, I’ll Exchange"

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

The drop in the KRW-JPY exchange rate was driven by both a stronger won and a weaker yen. In particular, the yen has weakened again against the dollar, pushing down the KRW-JPY exchange rate. Additionally, expanded dollar selling by exporters and increased forward selling by shipbuilders were also cited as reasons.

Accordingly, even those without immediate travel plans are engaging in so-called "yen-tech," aiming to profit from the undervalued yen. Experts advise that, amid high exchange rate volatility, it's safer to use a dollar-cost averaging strategy, investing bit by bit, rather than exchanging large sums all at once.

However, it remains uncertain whether the yen’s weakness will continue, as the likelihood of further interest rate hikes by the Bank of Japan is rising. U.S. Treasury Secretary Scott Bessent said in a CNBC interview on July 31 that "I believe the Japanese government and the Bank of Japan (BOJ) will take actions that will lead to a stronger yen."

Successful Currency Exchange for Travel Expenses: Tips for Yen-Tech

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Meanwhile, when exchanging currency for travel expenses, it is important to closely consider market variables. Since July, the Japanese government has tripled the departure tax from 1,000 yen to 3,000 yen. For a family of four visiting Japan, the departure tax alone now amounts to 12,000 yen (about 100,000 won). Another consideration for budgeting is the rising prevalence of "dual pricing," where local residents and foreigners are charged different prices at major tourist attractions.

Experts say, "The simplest way for individual investors to benefit from exchange rates is to purchase yen using a bank app or foreign currency account," since profits from typical personal currency exchanges are not subject to additional taxes.

There are also cautions for yen-tech strategies. Financial industry insiders advise, "First, you have to consider the spread—the difference in rates when buying and selling foreign currency. If the exchange rate increases only slightly, excluding the transaction fee, there may be no actual profit. It's also important to keep in mind that it's difficult to say with certainty that the current rate is the bottom."

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