Exchanging Travel Funds in Advance as Exchange Rate Plunges
Significant Increase in Individual “Yen Tech” Demand
“I had been exchanging 100,000 won worth of yen every time the rate dropped to the 880-won range, but as the yen kept falling, I ended up buying my plane ticket. It’s so cheap now that I’m planning to take my parents and go on a family trip this time.”
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With the won-yen exchange rate falling to the 850-won range per 100 yen, demand for travel to Japan is surging sharply. As more people are driven by the mindset of “buy when it’s cheap,” those who exchanged currency in advance are now suddenly making travel plans.
Yen Falls Below 850 Won… Japanese Travel Heats Up Again
In the Seoul foreign exchange market, the won-yen exchange rate dropped to the 854-won range during intraday trading, hitting the lowest level since November 2023. This is a drop of over 12% compared to the peak just three months ago. Considering that in the past, the rate typically hovered in the mid-to-high 900-won range and sometimes even around 1,000 won, this is a significant decline.
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The impact of this decline is tangible. Until mid-year, exchanging 100,000 yen required about 970,000 won, but now, 850,000 won is sufficient. With a savings of 120,000 won just from the exchange rate difference, people who originally planned solo trips are now expanding to family trips. In fact, recent SkyScanner data shows that some low-cost carriers have offered one-way tickets to Japan for around 110,000 won; this means that the money saved through currency exchange alone covers the cost of a plane ticket.
Netizens are sharing information related to traveling to Japan on social media. Thread capture
This popularity is also reflected in the surge of yen-denominated deposits. As of August 25, the yen deposit balance at the five major banks—KB Kookmin, Shinhan, Hana, Woori, and NH NongHyup—totaled 1.3456 trillion yen. This figure increased by 306.8 billion yen (29.5%) in just one month compared to the 1.0388 trillion yen at the end of July. This exceeds the previous record set in June 2024, when deposits totaled 1.2705 trillion yen, marking the highest balance ever. Applying the exchange rate at the end of last month, this amounts to roughly 11.5 trillion won.
Even Without Travel Plans, “Exchange Anyway”
The drop in the won-yen exchange rate is driven by both a stronger won and a weaker yen. In particular, as the yen once again weakens against the dollar, the won-yen rate is pushed down further. In addition, an increase in dollar-selling by exporters and forward yen-selling by shipbuilders are also cited as reasons.
As a result, even those without immediate travel plans are jumping into so-called “yen tech” to accumulate undervalued yen and aim for future profits. Experts advise that when exchange rate volatility is high, it is safer to buy in installments rather than investing a lump sum all at once.
However, it is uncertain whether the yen will remain weak. Expectations for additional interest rate hikes by the Bank of Japan are growing. U.S. Treasury Secretary Scott Bessent said in an interview with CNBC on August 31, “I believe the Japanese government and the Bank of Japan (BOJ) will take measures that will lead to a stronger yen.”
How to Successfully Exchange Travel Funds: Tips for “Yen Tech”
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Meanwhile, when exchanging travel funds, it is important to carefully check 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, just the departure tax alone totals 12,000 yen (about 100,000 won). It is also important to consider that a “dual pricing system,” where local residents and foreigners are charged different prices, is spreading in major tourist destinations, which should be taken into account when budgeting.
Experts say, “The simplest way for individual investors to take advantage of currency exchange opportunities is to purchase yen using bank apps or foreign currency accounts.” This is because there is no additional tax on profit earned from regular personal currency exchange transactions.
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There are also precautions to take for yen tech. Financial industry professionals advise, “First, you must consider the spread, or the difference between the buying and selling exchange rates when exchanging currencies. If the rate rises only slightly, after covering the cost of the exchange, there may be no actual profit. It’s also important to note that it’s difficult to say with certainty that the current exchange rate is the absolute bottom.”
This content was produced with the assistance of AI translation services.
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