Why does buying a cup of coffee in Japan cost more for Americans?
Exchange rate
Why does buying a cup of coffee in Japan cost more for Americans?
Imagine you're planning a trip to Japan and want to buy a cup of coffee there. You notice the price tag is higher compared to what you pay back home in the US.
The cost difference is because the value of US dollars changes compared to Japanese yen. When your money doesn't go as far in Japan, it costs more for the same coffee.
Example
A cup of coffee costs $4 in the US, but with an exchange rate of 141 yen to the dollar, it would cost you ¥565.6 in Japan.
Remember this
The exchange rate determines how much one currency is worth in terms of another, affecting prices for goods and services abroad.
Text adapted from Wikipedia, licensed under CC BY-SA 4.0.
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Educational content, not financial advice.
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