Katsu Curry Index Puts the Yen at 62.18 to the Dollar, Big Mac at 80.30
- A BNY Mellon strategist prices the yen at 62.18 per dollar using katsu curry
- The same method applied to the Big Mac gives 80.30 per dollar
- The near 18-yen gap shows Japan's everyday dining prices sit below global benchmarks
- Purchasing power parity measures goods, not market quotes: direction and scale, not timing
For anyone in Taiwan, how cheap the yen is has never been an abstract markets story. It decides which month you book the flight, whether you convert your cash all at once, and whether you carry a camera home. A BNY Mellon strategist has now priced the yen off a bowl of katsu curry and arrived at 62.18 to the dollar. Run the same method on a Big Mac and the answer is 80.30.
Neither figure is a market quote. Both answer a different question: what the yen should be worth if goods prices lined up across borders. The gap between the two — roughly 18 yen from the same method at the same moment, with only the basket swapped — is the real finding. Katsu curry sits at the bottom of Japan's dining price band, absorbing labour, rent and imported meat and oil. A Big Mac is priced by a global chain. When the local everyday meal implies a far cheaper yen, it means Japan's domestic prices are being held further below world levels than the global benchmark shows.
Three paths follow: convergence if the US-Japan rate gap narrows, wider undervaluation if it does not, or a wide trading range that punishes anyone converting in one lump. Convert in tranches, know whether your Japan holdings are earning asset gains or currency swings, and price into the Japanese market against local ceilings rather than the exchange rate.
