2026-08-21
This essay was originally written in 2012, when Japan was still mired in prolonged deflation and exchange rates in the ¥70–¥80 range to the U.S. dollar were being widely discussed. Fourteen years later, I am publishing it again as a record of the argument I made at the time.
This morning, the Asahi Shimbun devoted its front page to what it presented as a major scoop concerning the way signing bonuses had been paid to rookie players by the Yomiuri Giants.
This is something I had been thinking about for a long time.
Anyone who knows the astronomical difference between the salaries earned by professional athletes in the United States and those earned by athletes in Japan must surely wonder where on earth the argument comes from that even an exchange rate in the ¥70s to the dollar does not represent an excessively strong yen.
Japan, on the one hand, had been sinking in deflation for more than twenty years.
More than ten million young people, even after reaching the age of thirty, were said to be earning less than two million yen a year, making marriage all but impossible for many of them, while concerns continued to grow over the declining birthrate and aging population.
The United States, on the other hand, had continued to experience steady population growth.
As I have pointed out many times before, one need only compare the GDP of the two countries twenty years earlier with their respective GDP today.
When there is such an astronomical difference between the two countries, the claim that an exchange rate in the ¥70s to the dollar is acceptable—or even that the present rate, which has only just managed to recover to the ¥83 range, is somehow reasonable—is simply absurd.
Even the OECD purchasing-power-parity figure for Japan of ¥111.4 to the U.S. dollar seemed to me to represent a yen that was still too strong.