How Much Does It Cost to Live in Japan?

Expats moving to Japan can find the level of culture shock they experience extreme. However, for many, this is what makes a life in the sovereign island nation so intoxicating. It is the fourth most visited country in Asia and roughly 2 million of those living in Japan are expatriates.

The Legatum Institute, a London-based think tank, release their global Prosperity Index annually. The survey ranks the most prosperous countries in the world. Many assume prosperity is used in reference to the financial standing of a country and, while this is included, the Legatum Institute considers more factors in its ranking.

Ranking in 22^nd place in 2016’s report (out of 149 countries) was Japan. This puts Japan in the top 15%, with its ranking for safety and security (3^rd place), health (4^th) and governance (17^th) helping it achieve such a positive result. The two categories letting Japan down were social capital (101^st) and personal freedom (49^th).

With one of the highest employment rates in the world, incredible cuisine and unrivalled public transport, we uncover how much it really costs to live in Japan.

Japan’s Economy

Japan has the fourth largest economy in the world by GDP and third strongest by purchasing power parity. It is also the world’s second largest developed economy. Despite this positivity, Japan has the highest ratio of public debt to GDP and is suffering from a declining population.

Back in 2008, Japan started showing recessionary symptoms and has not recovered since. The economy is strained, partly due to a weak currency and frozen bond yields. 2016 did see an economic growth of 0.5% but projections show that development will remain below 1% until 2023.

Despite this bleak outlook, Legatum’s Prosperity Index of 2016 saw Japan ranked in 19^th place for its economic quality, ahead of powerhouses such as China and the UAE. It is also worth remembering Japan is one of the seven major advanced economies making up the G7; a group of the richest developed countries distinguished by national net wealth.

Currency

The official currency of Japan is Yen, usually shown as JPY or ¥. Along with the US Dollar and Euro, it is the most traded currency in the world.  There are 4 JPY notes, split into denominations of 1,000, 2,000, 5,000 and 10,000. Coins are available in 1, 5, 10, 50, 100 and 500 JPY.

Housing in Japan for Expats

What expats are most shocked about when moving to Japan is how expensive rent is. Although cheaper than the likes of London and New York, the larger the city, the more expensive the home, the stiffer the competition and the smaller the property. Essentially, Japanese homes are not what Westerners are used to and expats should expect zero mod cons. Even in a country that can reach 26°C in summer and 5°C in winter, properties are rarely equipped with central heating or air conditioners. You might be lucky to get a ceiling fan.

In rural Japan, expats may be able to get their hands on a larger home. But this is likely to be miles from work, health care facilities and grocery shops.

Expats looking for a home to rent in Japan should go through an estate agent. Japanese people rarely speak strong English, so adopt the skills of a bilingual friend or colleague. This will ensure transparency and enable your agent to find what you are looking for. Beware, landlords are reluctant to let to foreigners, so your estate agent will be a valuable asset for sealing a deal.

The majority of homes expats are likely to view in Japan will be either apato or mansions. Apato are older buildings, generally two stories high and filled with small apartments with thin walls. Mansions are often over two stories and made of concrete, eliminating the awkward unavoidable eavesdropping on your neighbour.

An alternative option many expats choose is to live in a gaijin house. This is basically a house share, with your own bedroom and sharing living spaces, bathrooms and kitchens. They are popular with younger expats and those wanting a short-term option.

Once you have settled on an apartment, be prepared to:

• Sign a lease for one or two years (aside from gaijin homes)
• Pay a damages deposit
• Pay up to four month’s rent in advance
• Have a guarantor (usually an employer)
• Sort your own utilities

Expat Healthcare in Japan

Legatum’s 2016 Prosperity Index results saw Japan ranked 4^th in the health sub-index. This category analysed Japan’s health infrastructure, basic physical and mental health care and preventative care. Beating celebrated healthcare giants, and with the highest life expectancy in the world (83.7), Japan are certainly doing something right with their medical industry.

Generally speaking, Japan’s infrastructure deals with routine care, prenatal care and infectious diseases. 70% of the costs incurred during treatment is paid for by the government and the patient must pay the remainder.

There are two public health insurance schemes available in Japan and expats with a visa exceeding 90 days must be registered to one. Expats whose employers do not include private healthcare as part of a relocation package can also make use of coverage via the national health insurance system. All hospitals and clinics in Japan run on a not-for-profit basis and they are operated by physicians, not corporations.

The medical system in Japan is widely regarded as one of the best in world. Not only are expats concerned about the language barrier between patient and doctor, but medical staff are too. To combat this, there are medical services in Tokyo and other cities that will direct foreigners to the nearest English speaking medical facility. As an expat without access to one of these centres, take a Japanese friend or colleague along to act as an interpreter to liaise with medical staff.

Whether you are visiting or planning on living in Japan for the foreseeable future, it is generally advised to find expat insurance to ensure you are covered for any medical aid, including outpatient care for expats that you may require.

Expat Education in Japan

Due to the language barrier in Japan, many expat parents tend to opt for international schools for their children. If fees are not covered by a relocation package from an employer, parents will be expected to pay the premium fees. On average, 6 years of international elementary school for a child is set to cost 8,240,000 JPY (£56,848) at the very least.

Expats with very young children, who plan on living in Japan long term,  may opt to send their children to a public or private Japanese school. Fees are considerably less (just uniforms and stationary for public schools) and allows children to understand Japanese culture and become integrated into society quickly.

However, if these options are not appropriate, home schooling is also common amongst expats in Japan. Although elementary and junior high is compulsory, parents can request permission for their children to enrol in ‘high school’ at home. Due to the language barrier, this can often be affective for short term living in Japan. Any longer, and children can often feel segregated from society.

Jobs in Japan for Expats

Chances are, if you know somebody who has moved to Japan, they have done a stint as an English teacher. It is the number one job for Western expats and some remain in the profession for countless years. Other than this, jobs for foreigners tend to fall into two categories; unskilled or highly specialised.

The Japanese government ensure nationals get first pick of employment opportunities. Japanese natives tend to shy away from manual labour and factory work so many expats tend to fill these roles. On the opposite end of the scale, jobs in blue-chip corporations and technology companies are often filled by English speaking expats. Foreigners who don’t speak English or have a high level of Japanese will find it very hard to secure work in the country.

Comparison to UK

The world’s largest database, Numbeo, has a vast selection of user contributed data in regards to Japan. Compared to the UK, the cost of living is significantly less in Japan.

The tables below provide an over view of the differences in costs between Japan and the UK. Please note that all Japanese prices have been converted into British pounds.