By Shawn Gallagher
The past couple of years have been a great time to travel to Japan. The nation has seen record-setting numbers of tourists and visitors this year, and next year is looking to follow this same path.
The country provides all sorts of sites and attractions for visitors, from historical architecture in Kyoto to its unique nature across the islands and the countless things to do in Tokyo. This, combined with macroeconomic policies from the US and Japan in recent years has made travel affordable for many visitors and has made the nation a very popular destination.
Favorable Economic Trends To Continue
The current depreciation of the Japanese Yen is continuing. The USD/JPY rate is at 157.11 JPY against the dollar as of 8pm on December 24, 2024.
Although strategists have been predicting a rebound and resurgence of the Yen in 2025, recent remarks and moves by the Bank of Japan and the Fed may show otherwise. In the past couple of weeks, we’ve seen the BOJ Governor comment on the possibility of waiting out rate hikes and the Fed considering slowing down monetary easing, both of which will maintain the rate gap between the two nations and keep the JPY weak for the time being.
This allows these favorable economic conditions for US travelers to continue going into 2025. However, both economies do have eyes on closing the rate gap, meaning taking a trip sooner rather than later in the year may be a good idea.
Related: Why is everybody traveling to Japan right now?
Nothing Like the Pandemic Days For Airfares
With less supply of flights between Japan and the US, along with a price elastic market of travelers between the two nations during the pandemic, airfares shot up in response. I regularly observed economy class fares between $2,000 and $3,000 and even had to swallow some of these inflated costs. However, with leisure travel demand back and more available routes, prices have (for the most part) gone down.
A typical fare between New York and Tokyo will go anywhere around $1,000 to $1,500 today, and up to about $1,800 during peak travel times. This is nothing like the pandemic days, and snagging these cheaper fares might be beneficial while they last.
Bottom Line
Taking advantage of the weak Japanese Yen is a must if you’re thinking about making a visit anytime soon. 2025 is shaping up to be a good year also, but with macroeconomic policies potentially seeing changes, it may be a good idea to book that trip a little sooner rather than later.