As the dollar dipped last week to its lowest rate against the Japanese yen in at least a year, servicemembers and their families in Japan hardly seemed to notice.
On Friday, the dollar’s exchange rate was 103 at military banking facilities throughout Japan and Okinawa.
The greenback’s highest exchange rate to the yen this year was 112 in May, said Lt. Col. Keith E. Muschalek, Japan country coordinator for military allowances at U.S. Forces Japan.
“It’s hardly even changing,” Muschalek said. “It’s not a big swing at all.”
In the fall of 2002, the military dollar exchange rate was 121, and the yen steadily has gained on the dollar since.
Though the dollar doesn’t stretch as far as it once did, servicemembers and their families in Japan and Okinawa say that, for the most part, they don’t shop or eat off base any less as a result.
“I guess I really hadn’t noticed,” said Staff Sgt. Nick Sessions on Friday of the exchange rate.
A member of the 373rd Support Squadron at Misawa Air Base, Japan, Sessions said he converts dollars to yen weekly because he lives off base. “I don’t really have much of a choice,” he said.
On Camp Kinser, Okinawa, Capt. Danny Chung, camp services officer, said it hasn’t kept his family from doing or purchasing anything. He did say, however, that he has noticed groceries — especially fresh vegetables — are more expensive. He said Thursday that he traveled to about five different grocery stores to find the best deal on vegetables, and he ended up paying about $3.50 for a head of lettuce.
Chung said that while the declining strength of the dollar has kept him from saving more money, or paying off some bills, it’s not going to affect how he shops off base.
“We will still spend money,” he said.
Staff Sgt. Adam Wahlgren of Yokota’s 36th Airlift Squadron said he prefers to head outside the gates for nightlife and entertainment but does most of his shopping on base — just for the sheer convenience.
“Going out here, the drinks are still expensive, so the yen rate isn’t going to change that,” he said. “When you get 10,000 yen out at the ATM, you immediately think $100 but it’s not really that high. You’re actually going out for $90, and that can get you more than you’re looking for.
“I figure, if I’m going to be in another country, I might as well enjoy it.”
The robust yen rate has reined in adventure for some, though.
Seaman Luke Spring of Sasebo Naval Base, Japan, said the current yen rate is somewhat limiting. “Restaurants cost more now, beer costs more, bus rides cost more, like if you want to go to Kumamoto,” he said. “When I first got here, if you pulled 5,000 yen from an ATM it was only about $42, and now it’s like $49-something. So, you don’t feel like you [can] take many trips and enjoy stuff around here.”
If Americans are spending less off base, Japanese retailers say they haven’t noticed.
Tadao Yamaguchi, owner of a Yamaguchi musical instrument store outside of Yokosuka Naval Base, said his customer base is holding steady.
“I haven’t seen differences in customers’ eagerness to buy.” he said. “They use credit cards and when using credit cards, you don’t think that much.”
Kunihiro Komatsu, who is in charge of sales and promotion of specialty stores at Seiyu in Fussa near Yokota Air Base, said most Americans buy groceries and clothes on base and when they come to Seiyu, they are looking for something special, such as Starbucks coffee.
Gunnery Sgt. Dave Cringan, the career retention specialist for Marine Air Group 36, also said the weak dollar isn’t going to change his habits.
“It doesn’t matter to me what the yen rate is,” Cringan said. “If I need to go out in town to get something, I’m going to go get it. It all equals out at some point — if the yen rate drops, [the cost-of-living adjustment] goes up, and if the yen rate increases, COLA goes down.”
Chung said he has yet to notice a change in COLA as he has only been on Okinawa for several months and when he got here, the yen rate was about 106. He said this has been the lowest he’s seen the rate go, and he’s interested to see how much his COLA increases.
“We’ll see what happens,” Chung said.
The COLA for servicemembers has inched up for many since May, when the dollar was at a high of 112 against the yen, Muschalek said. But any changes have been small, since it usually takes a cumulative currency change of about 10 percent to adjust the COLA index — which varies by location — up or down. In January, COLA was set at 140 for Camp Zama, Japan, for instance, and it’s currently 144. The Defense Department per diem committee adjusts military COLA on the first and 16th of each month. Officials have said that each COLA point is worth about $20, though it can vary widely based on years of service, pay grade and number of dependents.
The yen’s relative strength, however, is just one factor that influences COLA, a tax-free income supplement to equalize purchasing power between military personnel overseas and their U.S. counterparts: Some locations in Japan are about to see a decrease in COLA due to prices on the local economy. Every spring, USFJ conducts a “market basket” price survey, evaluating the cost of local goods and services from meat and vegetables to clothing and gasoline. Due to this year’s survey results, COLA will drop at Camp Kure by eight points; Misawa Air Base will see a four-point drop; Atsugi Naval Air Facility’s drop will be six points.
Muschalek said the COLA index at bases in these areas will drop by two points per month starting Tuesday. An E-6 with 10 years of service and three dependents will take a cut of $25 per point each month, Muschalek said.
COLA already increased Sept. 16 from the retail price survey at Camp Zama (eight points), Okinawa (two), Yokota (two), Iwakuni (two), Yokosuka (two), Yokohama (two) and Sasebo (four).
Muschalek, the USFJ military allowances coordinator, said the increases are implemented immediately, while decreases are phased in.
Some servicemembers who live off base said in recent days that they were taking a hit from the strong yen when paying rent.
“They give us a flat yen rate for rent,” said Senior Airman Stacy Green, a member of Misawa’s 373rd Support Squadron who lives off base. “When the yen gets stronger, we have to pay the difference in the yen rate. That takes money out of our pocket.”
Donna Marchak of Misawa’s housing office said staffers there haven’t noticed a trend of servicemembers opting not to live off base because of the stronger yen. For housing allowance, the yen exchange rate is reviewed every eight weeks to balance fluctuations, she said.
Hana Kusumoto, Vince Little, Greg Tyler and Fred Zimmerman contributed to this article.
