“Did I take advantage of the weak yen, or did the weak yen take advantage of me?” This tiktok trend encapsulates the complex dynamics at play in Japan’s current tourism boom. With a record surge of 36.87 million tourists flooding Japan in 2024, the nation has become a hotspot for shoppers eager to maximize the value of their stronger home currencies against the relatively weak yen.
While at first glance everything may look cheaper in Japan to tourists visiting the country due to foreign currencies having greater purchasing power relative to the yen, this also leads to the creation of artificial arbitrage, where tourists capitalize on price discrepancies and spend more than they normally would.
In fact, cognitive biases that make us irrational consumers play a major role in this phenomenon, with one of the most influential being the anchoring bias. Seeing high-end ceremonial matcha or vintage luxury brands triggers this as we instinctively have a tendency to compare the price to what we would pay back home, rather than assessing its true value. This could lead to a false sense of a bargain.
Moreover, in reality, many retailers anticipate this behavior and subtly adjust prices or offer limited-time “deals” to encourage impulse spending. Although menu costs discourage frequent price adjustments, businesses adopt alternative pricing mechanisms to shift consumer surplus towards themselves. For instance, Japan’s tax-free minimum purchase requirement, which often starts around ¥5000, plays into commitment bias, where shoppers feel compelled to purchase more just to qualify for the 8-10% refund that reinforces the perception of a bargain.
The bandwagon effect also impacts our decisions. As videos of tourists bulk-buying snacks and cosmetic products from Don Quixote overwhelm TikTok, Fear of Missing Out (FOMO) and loss aversion takes over. This creates a self-fulfilling cycle where more travelers feel compelled to join the rush, fearing they’ll miss the chance at “cheap” Japanese goods and regret it later.
So should we resist? Not necessarily. If you genuinely value the product, scarcity-based pricing isn’t necessarily bad. However, noticing artificial arbitrage and psychological pricing traps created by our biases as irrational consumers can help you make more informed choices.

References:

“Foreign visitors to Japan, their spending, hit record high in 2024.” Kyodo News, 15 Jan. 2025, english.kyodonews.net/news/2025/01/5afae65d7d61-urgent-foreign-visitors-to-japan-their-spending-hit-record-high-in-2024.html#google_vignette. Accessed 14 Mar. 2025.

Japan Shopping Guide: How to Shop. Japan Guide, www.japan-guide.com/e/e2450_how.html. Accessed 14 Mar. 2025.

Lim, Lionel. “The weak yen and ‘Instagram culture’ made tourism Japan’s second-largest export. Not everyone is happy about that.” Fortune, 10 July 2024, fortune.com/asia/2024/07/10/japan-travel-weak-yen-instagram-culture-rakuten-overtourism/. Accessed 14 Mar. 2025.