COLA rises across Japan, S. Korea on weaker dollar
Stars and Stripes August 5, 2009
YOKOSUKA NAVAL BASE, Japan — Cost-of-living allowances for servicemembers and housing allowances for federal employees in Japan and South Korea rose Monday, following sustained gains by the Japanese yen and the South Korean won against the dollar.
An E-5 with two dependents and eight years of service living off-post in Yokosuka, Japan, now receives an extra $637 in tax-free COLA, up from $630.93 two weeks ago and $568.75 one month ago.
Servicemembers in South Korea have seen smaller rises lately. An E-5 with two dependents living off-post in Seoul will receive $159.25 in COLA for the current pay period, up from $145.60.
Meanwhile, the Living Quarters Allowance hike reflects a higher cost of rent and utilities for federal civilians.
Misawa civilians with families are receiving the biggest LQA increase, at 11.4 percent. Civilians at Yokosuka, Yokota, Sasebo, Okinawa and other areas generally will receive increases in the 4- to 5-percent range.
Most increases in South Korea range from 5 percent to 6 percent.
The State Department’s Office of Allowances revises LQA yearly based on local surveys. It revises the figures quarterly if exchange rates make it necessary, according to the department’s Web site.
COLA is similarly affected by exchange rates.
On May 1, the commercial yen rate ended the day at 99.26 to the dollar. The retail military banking rate is typically two to three yen lower.
The rate then plunged to 92.36 by July 10 as bleak economic news led investors to sell stocks and riskier investments, which strengthened the relatively safe yen.
Since then, rising stock market indexes and better-than-expected earnings results have boosted the commercial rate back to about 95 yen during the past week.
Meanwhile, the South Korean won traded at 1,223 to the dollar on July 31, the lowest rate this year for servicemembers spending their dollar-based paychecks off-post.
The won was only slightly weaker on May 1 but had traded as high as 1,570 to the dollar in March.