June 30, 2026

Japan Is Now One of the World's Best-Value Developed Economies

Deutsche Bank Survey Reveals Japan's Growing Affordability—and Why It Matters Beyond Tourism

Japan has quietly become one of the world's best-value developed economies—not only for travelers, but also for consumers, investors, and global businesses. Buying an iPhone in Japan is now cheaper than in almost any other country in the world. Renting a spacious three-bedroom apartment in Tokyo costs only about one-quarter of what it does in New York. According to the latest global price survey covering 69 major cities by the Deutsche Bank Research Institute, Japan has become one of the most affordable places to live among advanced economies.

The findings highlight a remarkable shift in Japan's international competitiveness. While much attention has focused on the weak yen, the survey suggests the story is far broader: Japan today offers an unusual combination of relatively low prices, world-class infrastructure, political stability, and high quality of life.

From One of the Most Expensive Countries to One of the Best Values

The Deutsche Bank survey has been conducted regularly since 2012. At that time, during the Eurozone debt crisis, Japan was widely regarded as one of the world's most expensive countries as the yen reached historic highs. Over the past decade, however, the picture has changed dramatically. The Japanese yen has depreciated by roughly 50% against the U.S. dollar, while domestic consumer prices have risen by only around 20%.

As a result, the report concludes that Japan now stands out among developed nations as being "extremely undervalued" when prices are converted into U.S. dollars. Measured by purchasing power parity (PPP), Japan's overall price level now stands at 60, compared with 100 in the United States—a sharp decline from 125 in 2012.

Japan Offers One of the World's Cheapest iPhones

One of the clearest examples is Apple's iPhone 17 Pro (256GB). In 2026, the device retailed in Japan for approximately US$1,121 (around ¥180,000), making it one of the least expensive markets globally. Among major economies, only Japan and South Korea offered the model at a lower price than the United States. Because Apple sells essentially the same product worldwide, iPhone pricing is often regarded as one of the most reliable indicators of relative purchasing costs, reflecting exchange rates, taxes, and distribution expenses.

Tokyo Remains Surprisingly Affordable

The survey's "Budget Dating Index," which compares the combined cost of taxi rides, dinner for two, and two movie tickets, ranked Tokyo 13th among the world's least expensive cities. Delhi ranked as the most affordable city, followed by several emerging-market cities including Jakarta and Cairo.

Housing costs tell a similar story. Renting a standard three-bedroom apartment in Tokyo costs only about one-quarter as much as in New York, making Tokyo one of the most competitively priced major metropolitan areas in the developed world. For many international professionals, entrepreneurs, and digital nomads, Tokyo increasingly offers something once considered unlikely: global-city convenience at comparatively moderate living costs.

The Other Side of the Story: Japan's Wage Challenge

Affordability, however, comes with an important caveat. Japan's wages remain relatively low compared with many advanced economies. While the average monthly salary in Zurich exceeds US$8,000, the comparable figure in Tokyo is only around US$2,000, placing Japan 39th among the cities surveyed.

Although inflation has accelerated since 2022, wage growth has failed to keep pace, leaving real wages under continued pressure. When disposable income after housing costs is considered—a measure that more closely reflects day-to-day living standards—Tokyo moves closer to the middle of the global rankings. James Reed, Head of the Deutsche Bank Research Institute and author of the report, notes that the situation is "not particularly dire." Although salaries are lower than in many major cities, significantly lower rents help offset the difference.

Why Investors Are Watching Japan Again

The report also points to artificial intelligence as a potential catalyst for Japan's next stage of economic growth. Japan's stock market has recently benefited from strong performance in semiconductor and AI-related companies. Reed argues that Japan's aging and shrinking population could actually accelerate AI adoption, making productivity-enhancing technologies increasingly essential. "If AI becomes a major driver of productivity growth," he suggests, "Japan could be one of its greatest beneficiaries."

Beyond Low Prices: A Window of Opportunity

For years, Japan's relatively low prices have often been viewed simply as a consequence of a weak currency. The Deutsche Bank survey suggests a more nuanced picture. Japan today combines affordability with exceptional public safety, sophisticated infrastructure, reliable transportation, high-quality healthcare, and one of the world's most advanced manufacturing and technology ecosystems. For international businesses evaluating expansion, investors seeking long-term opportunities, or travelers looking beyond exchange rates, Japan's affordability is more than a pricing story.

It may represent a rare window of opportunity—where economic value meets stability, innovation, and quality of life.