Japanese yen hits record low against SGD on 14 Jan, good news for S’poreans planning a trip there

Singapore dollar hits historic high against Japanese yen on 14 Jan

Planning a trip to Japan soon? Singapore travellers may find their holiday budgets stretching further than usual.

The Singapore dollar (SGD) has strengthened significantly against the Japanese yen, with S$1 fetching 123.6 yen as of Wednesday (14 Jan), its strongest level on record.

The exchange rate rose on Tuesday (13 Jan) and continued climbing into Wednesday, meaning Singaporeans will receive more yen for every dollar exchanged.

In practical terms, meals, shopping, transport, and even accommodation in Japan could feel noticeably more affordable.

Political uncertainty weighs on the yen

According to Google Finance data, the SGD gained about 0.093% against the yen compared to the previous close of 123.5 yen on Tuesday.

The yen’s weakness has deepened amid political uncertainty in Japan, particularly speculation that Prime Minister (PM) Sanae Takaichi may soon call a snap general election.

Kyodo News reported that Takaichi told a senior Liberal Democratic Party official she is considering dissolving the House of Representatives at the start of the ordinary parliamentary session on 23 Jan.

With the PM enjoying relatively strong public support, an early election could consolidate her authority.

However, markets appear wary. Expectations of a renewed “Takaichi trade”, which has previously driven bond sell-offs, have contributed to a weaker yen as investors factor in looser fiscal conditions.

Strong US dollar adds further pressure

The yen’s slide is also tied to broader currency movements, particularly its widening gap against the United States dollar (USD).

Aggressive interest rate hikes by the US have bolstered the dollar’s appeal, prompting investors to favour USD-denominated assets over the yen, which is seen as comparatively weaker.

So far, the Japanese government has offered little indication that it will step in to stabilise the currency.

Any intervention would be decided by Japan’s Ministry of Finance and carried out by the Bank of Japan, typically by selling US dollars in the spot market to prop up the yen.

Until then, Singaporeans heading to Tokyo, Osaka, or beyond may find that their SGD buys a little more ramen, rail passes, and retail therapy than it did before.

Also read: Japan mulls crackdown on tax-free shopping & stricter residency rules for foreigners

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Featured image adapted from arkenstone_jr on Unsplash.