Yen's Rise Raises Question: Are Cheap Japan Trips Over for Australians?

For years, the Japanese yen's steady slide made Japan an affordable favourite for Australian travellers. Now, after Tokyo and Washington moved to prop up the currency, that era of easy bargains may be under threat.

Japan is Australia's third-most-visited destination, behind Indonesia and New Zealand, with about 1 million Australians visiting in 2025-26 - triple the number a decade ago. The Australian dollar has climbed more than 30% against the yen, cutting the cost of shopping in Tokyo, dining in Osaka and sightseeing in Kyoto.

Dean Long of the Australian Travel Industry Association calls it a "once-in-a-generation currency position," comparing it to when the Australian dollar surged past parity with the US dollar between late 2010 and 2013.

Forecasting currencies is difficult, and the yen's strength isn't guaranteed. Investors would need to unwind the "carry trade" - borrowing yen cheaply to invest in higher-yielding currencies - which has long pushed the yen down. The currency has hit roughly six-month highs against the US and Australian dollars, and analysts at IG warn that if it breaks key technical levels, "all bets are off."

Joseph Cheer of Western Sydney University doubts travel habits will shift quickly even if Japan gets pricier, saying Australians have "a great deal of tolerance" before rethinking Japan's value. But a sustained rise could open the door to Vietnam, South Korea and a "Chinamaxxing" trend drawing younger Australians toward Chinese culture. More Australians visited China than the US last financial year, and Vietnam's popularity has more than doubled in a decade. "South Korea can give Japan a real run for its money," Cheer says.