1 vs. 100
One year ago, the US dollar/Japanese yen exchange rate was around $1 = ¥120. That means 12 months ago a watch that retailed in Japan for ¥100,000 costed about $835. Today, a ¥100,000 watch goes for $1,000. This is the first time since the dawn of the Internet age the dollar has been worth so little in Japan.
Many mark the spring of 1994 as the beginning of the Internet age. That’s when it was opened to commerce after graphical user interfaces became widely available. Netscape launched it’s first Web browser in 1994. A few months later, Yahoo! went from being a graduate school project to something that allowed millions of people to easily “surf the Net.” Other browsers like MSN (1995), and Google (winter 1996), quickly followed.
Fast forward 13 years. Because of the weak dollar, ordering watches from Asia is now more expensive than at any time since the birth of the Internet.
As Americans see the price of gasoline rise a penny, or two, or more, several times each week, will we watch the dollar fall into the ¥80 value range, where it was in 1995? Even with the Internet, they’ll be few new watches from Asia arriving on my doorstep this year if it does.
For more from last fall on this topic on GMT+9, click here.
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March 14th, 2008 at 6:25 pm
It has been interesting the other way here in Canada. Looking at average annual exchange rates, from the 1950s through the mid 1970s the two currencies were fairly close, with the US dollar being worth anywhere between 0.97 and 1.07 Canadian. In the late 1970s the US dollar value rose to 1.15, jumped up to 1.30 in the early 1980s, and then gradually crept up to a high of 1.57 in 2002. So for the last 25 years, here in Canada we have gotten used to the US dollar costing 25% to 50% more than the Canadian dollar. That meant we became used to Americans crossing the border for cheaper tourism, and for us paying a bit of a premium to buy things from the US.
It’s been a rapid change since then, and the Canadian dollar is now worth more than the US dollar again, for the first time in 32 years. The two are still fairly close, but for me in Canada, it means that buying something from the US now costs me 40% less than it did just over 5 years ago!
For various reasons the US dollar has declined against most other currencies. It’s a pain for consumers purchasing stuff from other countries (like you mentioned), but I’ll tell you one thing, being on the other side of the equation, it’s a blessing for American manufacturers who are as a result now quite a bit more price competitive exporting to other countries. There is always a silver lining!
Thanks very much for the great posts, I’ve been reading for a long while now, especially like your Yahoo Japan reviews - just took the plunge the other month and made my first purchase from them, despite the translation difficulties - pics of my Seiko Laurel at http://www.harrybishop.ca/?p=468
Cheers
Harry
http://www.harrybishop.ca