Cost of Living in Japan
What a month actually costs, with rent and salary context
Japan is markedly cheaper than most people expect, and central Tokyo is the exception rather than the rule. Rent outside the central wards, everyday food, and public transport are all modest by developed-country standards, and a weak yen has widened the gap for anyone whose income is earned abroad. The costs that do surprise arrivals are the up-front charges on a rental contract.
| Price and wage statistics | Statistics Bureau of Japan source |
| Consumption tax | Commonly 10%, with a reduced rate around 8% on most food |
| Rent, one-bedroom, central Tokyo | Commonly around JPY 120,000-180,000 a month |
| Rent, one-bedroom, regional cities | Commonly around JPY 50,000-80,000 a month |
| Currency effect | A historically weak yen has reduced costs in foreign-currency terms |
An indicative monthly budget for one person
| Item | Central Tokyo (JPY) | Regional city (JPY) |
|---|---|---|
| Rent, one-bedroom | 150,000 | 65,000 |
| Utilities | 13,000 | 12,000 |
| Internet and mobile | 9,000 | 9,000 |
| Groceries | 45,000 | 40,000 |
| Commuting pass, often employer-paid | 12,000 | 7,000 |
| Health insurance and pension, employee share | varies with salary | varies with salary |
| Indicative total before discretionary spending | 229,000 | 133,000 |
The up-front cost of renting
- Key money, a non-refundable payment to the landlord, commonly equal to one or two months' rent in the older parts of the market.
- A refundable deposit, commonly one or two months' rent, from which cleaning and restoration charges are generally deducted.
- An agency fee, commonly around one month's rent plus consumption tax.
- A guarantor company fee, since most landlords require a guarantor and few foreign arrivals have a Japanese one.
- Fire insurance and a lock-change charge, each modest individually but routinely added.
- Taken together, moving into an ordinary rental commonly requires something in the region of four to six months' rent in hand.
Where the money goes differently from expectations
Eating out at the ordinary end of the market is inexpensive, and a full lunch commonly costs less than a coffee and sandwich in London or New York. Imported foods, fruit, and Western-style groceries are the exception and are expensive.
Domestic transport within a city is cheap and commuting costs are frequently reimbursed by employers as a matter of course; long-distance rail travel is not cheap.
Residents pay both national income tax and a local resident tax, the latter levied on the previous year's income, which catches people in their second year and again in the year after they stop working.
Salaries and the wage backdrop
Average wages in Japan have risen only slowly over a long period, and the gap with other advanced economies has widened in foreign-currency terms. Published wage and household expenditure statistics are maintained by the Statistics Bureau and by the Ministry of Health, Labour and Welfare.
The arithmetic favours those earning in a foreign currency and spending in yen. It is considerably less favourable for those competing for a Japanese salary in a Tokyo housing market.
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