When the Japanese yen recently weakened significantly, many users of multi-currency e-wallets seized the opportunity to convert their Singapore dollars for yen. YouTrip reported that it experienced its highest daily volume of SGD-JPY transactions on October 8, allowing users to exchange 117.85 yen for each Singapore dollar. This impressive figure surpassed the previous high by 77% during the yen’s decline in 2024, according to YouTrip’s chief operating officer, Kelvin Lam.
The surge in conversions began on October 6, with users rapidly exchanging money as the yen’s value fell to 116.9 per Singapore dollar. Revolut, a UK-based financial technology company, also noted a dramatic increase in conversions with its Singapore users, reporting a 13-fold rise compared to October 1. Ashley Thomas, head of strategy and operations at Revolut Singapore, highlighted that the spike reflected a clear trend among Singaporeans to take action in response to the yen’s depreciation.
Throughout the preceding months, the exchange rate fluctuated between 114 and 116 yen for one Singapore dollar. As a result of the recent weakness, the yen has been attributed to domestic political changes, notably the election of Ms. Sanae Takaichi as the new leader of the ruling Liberal Democratic Party (LDP). Although her leadership could potentially influence fiscal policy towards increased spending, complications arose when the Komeito party withdrew from the LDP coalition, causing uncertainty about the government’s budgetary ambitions.
Experts forecast that the Bank of Japan may still pursue interest rate hikes, which could help stabilize the yen. However, ongoing challenges such as Japan’s aging population and competition in manufacturing may continue to pressure the yen. Despite short-term expectations for currency weakness, some analysts believe the yen’s decline may soon be reversible, especially as it approaches historically significant low levels.
Japan is a favored travel destination for Singaporeans, with record numbers visiting the country in recent years. Observing favorable exchange rates, many travelers plan to exchange currency in anticipation of upcoming trips during busy seasons, including December holidays and the cherry blossom season in March and April of the following year.
Overall, while the current situation offers favorable rates for travelers, it’s essential to approach currency exchanges cautiously and consider staged exchanges rather than bulk transactions to mitigate risks associated with potential market volatility.