What is it that’s so expensive about Japan?

Descriptors of Japan being an expensive country to live in and to travel in are dragged out with all the predictability of a politician avoiding the key issue.  Japan's country’s costly reputation is not helped by poll after annual poll of Tokyo featuring on some such list of the world’s most expensive places to do, well, what exactly? Live, travel, go out on the tiles? What is it exactly that it’s so expensive to do in Japan?

If the reputation is real, why should it even be an object of derision or confusion? Japan is, after all, the world’s third largest economy with a pretty high standard of living and typically this kind of living needs paying for.

It should also be noted that Japan, maybe more than anywhere on this planet, has a lot of toys. By ‘toys’ we mean tempting stuff that screams out, “You need this in you life!’ (even though you emphatically don’t). In this sense, Japan is the retail marketer’s wet dream, a country saturated with people whose favored pastime is shopping and who have the kind of income (or parents with the kind of income) that can facilitate it.  

Without doubt though, the question is often asked, "Why is Japan expensive?".

So, what is it that’s so expensive about Japan?

This piece is aimed at those who have yet to arrive in-country and might be quaking in their boots that A) they could be priced out of a dream move to Japan, or B) the move is already in motion and they’re worried about being in too deep in respects to their finances.

We’re specific in our choice of the word ‘move’. In large part, the following expenses have been compiled based on a life in Japan, although there may be some morsels leftover for the Japan traveller to chew on and think about.

It should also be noted that while the following have the potential to drain the expat in Japan’s coffers, in most cases it remains only that; a potential. Self-discipline, seeking out alternatives, creativity and/or some good old conservatism can keep the cost of living in Japan down.

There are also lots of expenses in Japan to choose from, 5-star hotels, dinner at Sukiyabashi Jiro, countless branches of Louis Vuitton … but we’ve listed-up those expenses that are likely a common threat to all foreigners living in Japan.

Apartment expenses

Where Japan lives up to a reputation of being an expensive place to live is when it comes to renting an apartment.

It’s been much documented by now, but often when entering into a lease agreement for a new apartment in Japan there are some staggering expenses to be paid up front (and not to be returned).

Of course, a deposit is normal (one month’s rent). A cleaning fee may also be expected (up to one month’s rent). Some sort of ‘handling’ fee to an estate agent, painful but, well, OK.

But then we come on to mysterious entities like ‘key money’ and ‘gift money’ for the landlord (Is two year’s worth of rent not enough?), all of which can leave prospective tenants handing over three to six month’s worth of rent before they can even get hold of the keys.

Let’s do the math; a cheap place in Tokyo for one ~ 60,000 yen per month. This could mean an upfront payment of 180,000 - 360,000 yen. At the current rate, that’s ~ $US 1,500 - 3,000 / ~ £1,200 - 2,400 / €1,500 - 3,000.

To add to the indignity, typically with Japan rental agreements, when you renew a (typically) two-year contract, you then have to pay an extra month’s rent to be afforded the privilege of paying rent for another two years. It’s enough to make an expat weep, were it not so hilarious.

Alternatives

Thankfully, and increasingly, agencies and apartment owners in Japan are clocking onto the fact that there is more custom to be had if they ditch some of these fees. It might also be something to do with a shrinking population leaving behind plenty of apartment units that need to be filled. Whatever, it’s increasingly easier to find such agents/apartments in Japan, especially if you are flexible.

Share houses. OK, so they mean sharing and are barely a step up from university digs, but they pretty much do away with all but a small(er) deposit, and cleaning fee.

Seek employment with companies that have their own apartments. Easier said than done, of course, but if you can come to Japan this way, the key money and gifts have already been paid, and who knows, your employer may even take care of the utilities.

Shinkansen / Bullet train

It pains us to say anything negative about Japan’s Shinkansen. They are, after all, everything that transportation systems around the world aim to be; clean, smooth, fast, record-breaking, intuitive, on time, frequent, safe, politely and attentively staffed, multi-lingual, no fuss, easy to use, and they look cool (from the outside at least).

They are, however, expensive. Yes, the Tōkaidō Shinkansen might whisk you between Tokyo and Osaka in a couple of hours with departures every 10 mins (just making that bit up, but pretty sure it’s something like that) but, yes, it does cost 13,620 yen ($US120/ €93 / €110) one way.

As much as we all want it to be, it isn’t cheap. It’s a shame, because for all but the real long-distance journeys within Japan, Shinkansen are emphatically the easiest way to do inter-city travel over here.

Alternatives

The bus is the cheapest way to travel in Japan. Consider the above journey from Tokyo to Osaka (well, Shin-Osaka) …

Nozomi Shinkansen - 13,620 yen - 2.5 hrs

Bus - 4,000 - 9,000 yen (depending on seat/class) - 9 hrs

Time or money?!!

Within the last few years in Japan, the budget airline industry has, err, taken off. LCCs (low cost carriers) like Peach and Jetstar are now providing some much needed competition to Japan’s flag carriers ANA and JAL. If your journey is long enough to warrant all the faff of checking in and getting to/from airports, Japan’s LCCs can certainly save you money.

Golden Week and the gang

Japan’s ‘big three’ holiday periods, Golden Week (end of April / early May), Obon (not a national holiday but usually mid-August), and New Year, are good in the sense that they are fixed. You don’t have to risk the mood of a miserable boss to book them off. They’re in the bank, so to speak.

Unfortunately, so is any money that you might spend on getting out and enjoying these holidays. Not your bank though, that of the travel industry’s. And we are talking about large sums.

Back home the money you might save for that once-in-a-lifetime luxury holiday could be dropped in one go on a crowded few days at a working-class onsen during Golden Week in Japan. OK, maybe an exaggeration, but it’s no exaggeration to say that going anywhere of distance WITHIN Japan during these periods is expensive (and crowded) to the point that most expats in Japan just don’t go anywhere. 

It’s going to sound absurd (and is the reason we capitalized ‘within’) but such is the expense of travel / accommodation during these times it’s often cheaper or better cost-performance to leave Japan all together. Why fight the crowds heading down to Okinawa when for about the same price you can get to Bali (and enjoy the vastly cheaper cost of living/holidaying)?

Of course, if you’re not the organized type, you probably won’t be going very far during Japan’s holiday periods anyway, as so much of the transport / accommodation is booked up far in advance.

Alternatives

Like we said, leave Japan. Seriously.

Stay at home (Isn’t that what the New Year period is for anyway?).

Keep it local.

The latest tech

Maybe it was just this expat, but prior to living in Japan I had harbored the assumption that because the country was so tech-savvy and responsible for so many of the latest bits of kit that some of us get all giddy about, this would be a good place to get some it on the cheap.

I know now that it isn’t the case, but when I see all the tourists out for a shop in places like Akihabara, I wonder if they are holding onto the same assumption? Well, anyway, it’s a mistake.

The latest game consoles, games, phones, Macs, laptops, tablets etc are expensive in Japan. Added to which this is a country which, if it could, would be physically sick upon the sight of last year’s model.  It has no time for it. It’s either got to be new, or the consumer is forced to try their luck by going secondhand (and if that’s in good nick there’s little difference in price).

Like it or not though, we need some of this kit in our lives and when it breaks, turns out to be from the wrong region, or can no longer make room for all the apps and updates, we need to dig deep in Japan to get a new one.

Alternatives

Secondhand stores are an ever-present in Japan with many stocking game consoles, laptops, cameras, kitchen tech etc.

Gamers! Learn Japanese so as you’re not having to buy imported games which tend to be more expensive.

Time your purchases for when you visit home, so as you can at least get these kind of things (particularly laptops and their OS/keyboards) in the language of your choice.

Stores in places like Akihabara sell factory reject models of imported laptops. You don't get the same kind of warranty / coverage that you might with a regular Japanese model, but you'll have the English-language OS and will be able to get prices down to around 40,000 yen for a basic model.

Pension / City Tax

For many expats in Japan, income tax is low (for most it will likely be 10%). It used to be even lower but then people here stopped having babies. Still, 10% isn’t too bad, if you view income tax in that way. However, Japan has other forms of payment to the state that can be a bit of a drainer and likely account for a lot of those occasions when we are genuinely puzzled as to where our money is going.

Some expats in Japan consider paying into a state pension ( Kokumin Nenkin / 国民年金) a good thing. They are right in the sense that it probably means they have an employer who is doing things correctly, and maybe there will be some return for them when the time comes.

Right now though, this is hard to see. Pensions in Japan are going up as the population ages and demands more funds to look after the elderly. And this is an important point. Many of us interpret the ‘pension’ as being something that pays out money to our bank accounts when we retire. In Japan this is only part (arguably the least important part) of the story, and given the current situation here, most of the state ‘pension’ we pay into is being used right now.

Anyway, this is to digress a little. The point is that on, say, a monthly wage of 250,000 yen, you’re looking at around 15,000 yen (US$130 / £100 / €120) a month going into the pension. If you pay it. (One of the benefits of working for a cheap-skate company in Japan, is that you won’t.)

As for city tax, you often hear the labored call from expats in Japan, “No taxation without representation!” Yea, well who’s going to come and collect your garbage then? Of course, they are right to a certain extent, the expat probably doesn’t benefit as much from city tax payments as the Japanese do, but we can’t actually quantify that.

The good news for the new arrival to Japan is that you aren't required to pay city tax during the first year in-country. Emphasis on the word 'during'.

City tax is calculated on the previous year's salary, and you'll be billed for it around May the following year. Even if you only plan to be in Japan for year, the bills will still arrive and you'll be expected to pay. A lot of people just leave.

It's difficult to be definitive about how much expats in Japan will pay in city tax as it's based on salary and location. Expecting somewhere between 150,000 - 200,000 yen (US$1,300 - 1,800 / £1,000 - 1,400 / €1,200 - 1,600) over a year wouldn't be unreasonable.

Alternatives

Well, none really. That said, the authorities in Japan are pretty relaxed about when you pay these things. You can be pretty late before they start sending the polite requests. Quite what the next stage is we can’t be sure, but rumors and horror stories can be found across the Internet about authorities demanding back payments, even from Japanese spouses.

Fruit

Unscrupulous retailers in Japan have pulled off the stunning feat of convincing swathes of the population here that fruit is actually a kind of ‘brand’ luxury rather than something that, well, grows on trees and stuff. Consequently the purchase of, say, a watermelon can be something akin in significance to acquiring a pair of Jimmy Choo shoes. It’s OK though, the watermelon will come perfectly round, has been sung to sleep every night, and was fed on a diet of protein shakes and Evian water.

Of course, just like shoes Japanese fruit has its own version of Johnny Chew, but compared to back home, it’s still absurdly expensive. Perhaps 'absurd' is the wrong base term. 'Infuriating' would be better. Because we need to eat fruit don’t we? That’s what the doctor says; five a day or something like that. Well, five a day in Japan just isn’t affordable. So I guess we have to inhibit our growth then? Or just suck it up.

Thanks a lot famous Japanese retailer of madly priced fruit! You know who you are!

Alternatives

Not an alternative but … bananas. These are cheap, I think. At least 99 yen for a bunch seems to be cheap compared to the rest of the fruit in Japan.

80 - 100-yen pots of jelly with bits of fruit in them. Does that sound cheap? Maybe, when the price of a single apple could get you three pots.

Fruit in Japan bears the brunt of many an expat rant, basically because it should be a staple. There are other foodstuffs that are very expensive in Japan but they are much more easily avoided. Cheese, for example.

A random collection of the overly priced in Japan

OK, so 'overly priced' is matter for the individual to judge, but potential expats in Japan my find that the following will sting a little ...

Movie theater tickets - Lot's of special deals / days going on in Japan but the standard price of 1,800 yen might be a sore point for some.

Dogs - A bit like fruit, Japanese people have very much been sold on the idea that your mutt needs to be some kind of high-performance thoroughbred, deserving to be pushed around the streets in a custom designed pram. (Really!)

Those miniature dachshund puppies that are so popular in Japan all look so cute, lined up in the pet shop, until you look at the 200,000 yen + price tags.

Mine's a 1,000 yen mongrel that someone rescued from the streets if you don't mind.

Books and magazines - There are plenty of options to buy really cheap foreign-language novels in Japan, from secondhand stores. Going for something new, 1,500 yen might be considered cheap in this market. Prepare to pay 2,000 - 3,000 yen in some cases though.

As for foreign-language magazines, this must surely be considered a luxury for the expat in Japan, especially when they sell for same kind of price as book.

Cookies, biscuits and bread - Let's be clear on this - Japan knows nothing about bread. You can know this because they sell nutritionally bankrupt white half-loaves for, at rock bottom, 80 yen, going up to around 200 yen for the 'good stuff'.

Finding a full loaf (if you could afford it) is nigh on impossible. (Sometimes they even have the audacity to package up a couple of slices.)

Get into a conversation with a local about which staple is better, bread or rice, and you'll be derided for lending your support to the former. Odd then, that when emergency strikes, typically the first food stuff to fly off the shelves is bread.

Cookies and biscuits have a poor cost-performance in Japan. You might be able to get something plain and boring for 100 yen. 150 - 200 yen for no-frills chocolate chip cookies or maybe a pack of 6 - 8 biscuits with some kind of filling. Going to the higher end of supermarket offerings and you're into 300 yen + territory.

The real annoyance here though, is that Japan insists, in most cases, on individually wrapping each cookie / biscuit. Surely there's money (and environment) to be saved here.

Vending machines - Vending machines are an ever-present in Japan (except for when you really need them, in which case they are often infuriatingly absent).

It's their omnipotent nature that makes them a danger to your loose change. Soft drinks, coffees, teas, and cigarettes are the most likely threat.

While these things are not so expensive in Japan, if you don't keep track of how often you're dropping money into the vending machines, they could well be another reason why Japan has a reputation for being an expensive place to live. Self-discipline required here!

There are plenty more examples of why Japan might be considered an expensive place to live, but as we said at the start of the piece, it needn't be thus.  

Just as there are plenty of ways to spend lots of money in Japan, there are also ways to save it, or at least make Japan an affordable place to live, some of which you can find here on City-Cost.  Like this post for a start:  Easy Ways To Save Money In Japan … Or Lose it!

Related

COST OF LIVING IN JAPAN in 2022, inflation & the weak yen:

Do you have your own answers to the question, "Why is Japan expensive?".  Indeed, do you think it actually is?  Let us know in the comments (and share your 'save money in Japan' tips, too)!