For most Americans in Japan—and even more non-Americans—the U.S. election might seem like a distant event with little impact beyond U.S. borders. However, Donald Trump’s landslide victory has already started to make waves in the economy. Trump’s policies, especially those around trade and tax cuts, could have far-reaching effects. With the yen expected to remain weak and exporters seeing boosted profits, let’s explore what Trump’s 2024 victory means for Japan.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of GPlusMedia Inc. or GaijinPot Blog.
The Weak Yen: Impact on Residents in Japan
In the wake of Donald Trump’s victory, Tokyo’s stock market surged, with experts predicting that the yen will continue to weaken under his administration. This is largely due to his economic policies, such as looming tax cuts and trade wars. Rising U.S. interest rates and global sentiment favoring the U.S. economy are also contributing to the yen’s decline.
For Japanese exporters, a weaker yen is great news—it boosts overseas profits when converted back into yen and has given the stock market a nice little bump, with the Nikkei rising. But for residents, the story is far less rosy. The weak yen means a higher cost of living, which may start to feel painfully apparent in everyday expenses.
Everything from groceries to electronics is getting more expensive, and this isn’t limited to just specialty items. Japan relies heavily on imported energy resources, such as oil and natural gas, so utility bills are also likely to rise, adding more pressure to household budgets.
This wouldn’t be so bad if salaries had kept pace, but with only a 10% increase over the last 30 years, making ends meet has become increasingly difficult. The average annual wage in Japan is around ¥4.5 million (about $30,000 USD), and it’s even tougher for English teachers, who earn about ¥3.3 million (roughly $21,000 USD). Hey, at least eggs are still cheap.
Travel Isn’t Getting Cheaper
If Trump’s policies weaken the yen further, the impact will extend to local businesses, too. Restaurants that rely on imported ingredients may be forced to raise prices. Smaller enterprises that cannot easily absorb these extra costs might struggle, leading to tough decisions like reducing staff or scaling back services. For residents, this means fewer affordable dining and shopping options, i.e., more onigiri for dinner.
Traveling home is already out of many expats’ budgets. Even destinations in Japan are becoming pricier as tourists, drawn by the weaker yen, flood in and drive up prices. Travel—both abroad and within Japan—has become more expensive as “budget” destinations like Thailand outpace the yen, and tourists are literally pricing out Japanese residents from hotels in Japan.
That said, if you’re living in Japan and getting paid in USD, you’re having a real good time.
Trump Might End Double-Taxation
For U.S. citizens living in Japan, one of the major issues they face is the burden of double taxation. The U.S. taxes its citizens on their worldwide income, meaning even if you’re paying taxes in Japan, you still need to file with the IRS.
Under the Foreign Earned Income Exclusion (FEIE), U.S. expats can exclude up to $120,000 of their foreign-earned income from U.S. taxation if they meet certain criteria. This means that, for many Americans who make less than this amount in Japan, there isn’t actual double taxation—although they are still legally required to file their tax returns.
Trump has promised to end double taxation for Americans living abroad. This pledge is music to the ears of many U.S. expats, who have been lobbying for years for a shift toward residence-based taxation—a system that would ease the compliance burdens and prevent them from paying taxes on the same income twice.
While the details of Trump’s plan are still vague, it’s a potential game-changer for Americans in Japan and elsewhere, allowing them to focus more on their lives abroad and less on the complexities of U.S. tax law.
Americans With Student Loans
If you’re paying off student loans in U.S. dollars, a weaker yen means you’ll need more yen to cover those payments. That makes an already difficult financial situation even more stressful. And for those holding out hope for the $1.7 trillion in student loan forgiveness proposed under President Biden’s administration? As Walt Disney once said, “That ship has sailed, Tiffany.”
Donald Trump’s landslide victory and a Republican-controlled House and Senate have put hopes for widespread loan forgiveness on life support. With Trump’s 2024 win, relief options for Americans with student loans—especially expats—are looking increasingly unlikely. The SAVE plan is likely dead, and Project 2025 is set to end key programs like Public Service Loan Forgiveness.
Wealthy Republican donors, like Home Depot CEO Bernie Marcus, have played a key role in blocking debt relief efforts. Even when Democrats had a slim Senate majority. President Biden pushed for student loan forgiveness, but the right-led Supreme Court blocked his plan. As a result, many borrowers are left with fewer options for relief.
With Republicans in control, policies will likely continue to favor corporate interests and tax cuts for higher-income groups. Income-driven repayment plans and broad loan forgiveness are unlikely to expand under this administration. For American expats already facing a rising cost of living and a weak yen, options for student loan relief may remain limited. Over the next few years, finding financial relief could prove challenging as the prospects for significant reform appear uncertain. I. e., prepare to eat a lot of onigiri.
If you think you can just run away from your student loans and live an expat life in your anime-dream world, think again. Republicans are already gunning for you. Back in 2018, there was a proposal to withhold passports from people who were in default on federal student loans. Today, that is about seven million people.
Trump Could Embolden Far-Right Groups in Japan
Many fear that Japan’s closer ties with Trump’s America could boost far-right factions. Especially those with racist, anti-foreigner views or outdated ideas on feminism.
Trump’s rhetoric and policies on immigration and women’s rights have fueled far-right groups in the U.S. A similar shift in Japan could empower nationalist and conservative groups here. These movements might feel validated by Trump, making it harder for Japan to adopt progressive policies.
Most of Japan’s leaders are considered moderate. Still, they could shift rightward to please these far-right groups or strengthen ties with the U.S. For instance, adopting policies similar to Trump’s on immigration could signal a political shift in Japan.
This could impact everything from foreign labor policies to gender equality, making it harder for Japan to move toward a more inclusive future.
How do you feel about Trump’s impact on Japan? Let us know in the comments.
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The election of Donald Trump poses serious problems for Japan. Any Republican victory would have somewhat distanced the two governments from each other: Democratic presidents have always chosen ambassadors who had direct access to the White House; the same cannot be said of Republicans, for whom Japan never had the same priority.
This is not even a typical Republican; this is Trump and his attitude, and therefore American policy towards Japan will be determined solely by his personal feelings at any given moment. Thusly, he does not like climate change, therefore it does not exist and therefore he can abrogate US obligations regarding the environment. In 2016 he came to office threatening North Korea until he, in his own words, “fell in love” with Kim and all threats vanished.
A great strength of US foreign relations throughout history, has been its trustworthiness. America as a very high national debt but, as with Japan, investors know that they will always be paid on time. Diplomatic agreements by previous administrations bound their successors. President Biden, was obligated by the Trump-Taliban agreement to withdraw the military from Afghanistan and so he did.
This trust is gone and, considering the fact that this is the second time that the US had chosen Trump, one must assume that this trust can never quite return. Trump might allow Putin to take part or all of Ukraine and it is certain that Netanyahu will annex Gaza and the West Bank during Trump’s administration.
Japan has always assumed that if threatened, the US was there: America had its back. No longer. One can imagine Chinese business deals and patents advantageous to the Trump family companies changing his attitude. A safe bet is that Trump will be invited to Beijing. A full-scale military parade in his honor at Tiananmen Square and some sort of appropriate decoration might well cause him to “fall in love” with Mr. Xi; Trump, after all, has an affection for powerful bullies, and Xi is certainly that.
One might see new threats to Japan’s southern islands. Taiwan is definitely in danger as might be South Korea, with whom Japan must quickly solidify relations far closer than ever established before.
I am a citizen of the United States of America (U.S./USA) 🇺🇸 … America is the name of the entire continent from Alaska to Tierra del Fuego.
Please refer to my country by its name, not by the name of the continent.
MAGA = More Anarchy Guaranteed Ahead
tRump is an ignorant, narcissistic, megalomaniacal, dipshit.
He is as deep as a cardboard cutout of Hitler.
There is no thought no substance.
He is a gold-plated toilet.