USD to JPY purchasing power parity
Dollar-to-yen purchasing power parity on OECD data, worked in both directions, and why it differs so much from the market exchange rate.
The rate, both directions
- 1 USD at purchasing power parity
- ¥101.00 JPY
- 1 JPY at purchasing power parity
- $0.0099 USD
- $1,000 in the United States buys, in Japan,
- ¥101,000
- ¥1,000 in Japan buys, in the United States,
- $9.90
OECD household final consumption expenditure PPPs, 2024.
The dollar–yen pair is the textbook case of PPP and the market rate parting company. In recent years the market rate has traded well above the PPP rate, and that gap is the arithmetic behind Japan feeling inexpensive to foreign visitors: domestic prices have not moved to match where the currency trades.
For anyone comparing a Japanese salary or price to a US one, this makes the choice of rate consequential rather than academic. Converting at the market rate understates what the money buys inside Japan; converting at PPP is the closer measure of living standards.
How the conversion works
amount in B = (amount in A ÷ PPP rate of A) × PPP rate of B
A PPP rate is the units of local currency that buy what one US dollar buys in the United States, so the US rate is 1 by construction and any pair runs through it. Use the full calculator to convert an arbitrary amount across all 43 countries at once.
Frequently asked questions
Why is the USD/JPY PPP rate so different from the exchange rate? ▾
Market exchange rates are set by capital flows, interest-rate differentials and expectations, none of which have to track domestic price levels. Interest-rate divergence in particular has moved the yen a long way from where relative prices would put it, while prices inside Japan adjusted far more slowly.
Which rate should I use to compare a Japanese and a US salary? ▾
PPP, if the question is standard of living — it reflects what each salary buys where it is earned. Use the market rate only if the money will actually be converted and spent across the border.
Other pairs
- USD to EUR — why there is no single euro PPP rate, and what each euro country's rate is
- USD to GBP — dollar and pound compared at purchasing power rather than the market rate
- USD to CHF — why Swiss salaries look larger at the market rate than at PPP
- USD to CAD — the US–Canada comparison at purchasing power, not the market rate
- USD to NOK — Norwegian prices and pay compared at purchasing power parity
- Average Salary Explorer — OECD average wages in nominal, real and PPP-converted terms.