Why Is Japan’s Big Mac So Cheap?

If you’ve ever visited Japan, you might have noticed something surprising: despite being one of the world’s most developed economies, many things feel remarkably affordable. The Big Mac is a perfect example.

The Numbers

At ¥480, Japan’s Big Mac costs just $3.15 USD at current exchange rates. Compare that to the US price of $5.79, and Japan is 46% cheaper.

What’s Behind the Price Gap?

1. The Weak Yen

The Japanese yen has weakened significantly against the US dollar in recent years. In 2021, ¥1 was worth about $0.009. Today, it’s worth approximately $0.0066. This 27% depreciation makes everything in Japan cheaper for dollar-holders.

2. Stable Domestic Prices

While the yen has fallen, McDonald’s Japan has kept Big Mac prices relatively stable in local currency. The price has only risen from ¥410 to ¥480 over the past five years – a modest 17% increase.

3. Labor Costs

Japan’s minimum wage, while rising, remains lower than in many Western countries. McDonald’s can operate with lower labor costs, which translates to lower menu prices.

What Does This Mean for Travelers?

For visitors from the US, Europe, or other strong-currency countries, Japan offers incredible value:

  • A Big Mac meal that costs $8 in the US is roughly ¥650 ($4.30) in Japan
  • Fine dining experiences are similarly discounted
  • Hotels, transportation, and entertainment are all more affordable

The Economic Implications

The Big Mac Index suggests the yen is significantly undervalued. According to purchasing power parity theory, the yen should be worth about ¥83 to the dollar, not the current ¥152.

However, currency values are influenced by many factors beyond burger prices:

  • Interest rate differentials
  • Trade balances
  • Government policy
  • Market sentiment

Conclusion

Japan’s cheap Big Mac is a symptom of larger economic forces – primarily the weak yen. For travelers and foreign investors, this represents an opportunity. For Japanese consumers and policymakers, it’s a more complex story of currency dynamics and economic policy.

Data updated January 2026. Exchange rates from Tokyo FX Market.