New ‘Katsu Curry Index’ aims to show how weak the yen really is
One bank strategist argues that an international price comparison for the pork-and-rice dish — rather than burgers — gives a better sense of how the yen's retreat feels.
A Bank of New York Mellon senior strategist has developed a new index to measure the yen's weakness by comparing the price of a Japanese fast-food dish, katsu curry, to gauge the currency's impact. The Katsu Curry Index suggests that the yen should be significantly stronger against the dollar than indicated by traditional measures.
This index, based on prices from CoCo Ichibanya, the world's largest curry-rice chain, shows that one dollar should only buy about ¥62.18, rather than the ¥159.23 seen in the foreign exchange market. The Bank of America strategist argues that the yen needs to strengthen to match the purchasing power of high-income countries. The yen has been a focal point for the global foreign exchange market since Japanese and U.S. authorities intervened to strengthen the currency, but it has since lost half of its gains.
While a weak yen makes traveling abroad and purchasing foreign goods expensive for Japanese consumers, it is also causing price increases for meals, services, and other consumer goods at home. Yu believes that if the cost of a katsu curry or bowl of ramen becomes too high, it could lead to calls for policy changes in Japan.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
