Cost of Living in Japan – 2023 Guide

So, you are ready to plunge into your dream life in Japan! Japan is a great place to start a new life, with excellent career opportunities, boundless sightseeing, and plenty of safe and friendly neighborhoods.

However, Japan is also infamous for the high cost of living, so it is essential to keep a few basic things in mind when deciding to live and work in Japan. 

So, before moving, you should ask yourself: “Can I actually afford to live in Japan?” and how can I optimize the cost of living in Japan?

Thankfully, the answer is almost always a resounding yes! However, there are a few key points that those considering life in Japan should be aware of. First, don’t start planning your budget until you read this article!

(You may also like to read the guide for software developers’ salaries in Japan.)

Why is Japan so expensive?

The following are 9 main reasons for Japan being as expensive as it is:

1. Highly developed economy
2. Limited land area
3. Very low self-sufficiency for energy
4. Very low calorie-based self-sufficiency
5. Remarkably high service levels and high efficiency
6. Remarkable quality consciousness
7. Incredibly detailed maintenance levels
8. Vulnerability to natural disasters
9. Aging and Declining population

Highly Developed Economy

With a GDP of US$ 4.231 trillion in 2022, Japan ranks as the 3^rd largest economy globally. Moreover, developed economies have higher wages and higher expenditures to provide better service levels and infrastructure and maintain a better quality of life.

Combining all the above factors results in a higher cost of living than developing countries. And Japan is no exception to having a comparatively higher cost of living from this point of view.

Limited Land Area

Japan’s limited land area and very high population density cause higher real estate costs than most developed countries.

Japan’s total land area is 378,000 square km, 5.7% higher than Germany’s 357,600 square km. However, as per the 2021 data from the World Bank, the total population of Japan 125.7 is 149.11% of Germany’s January 2023 estimate of 84.3 million people, i.e., one and a half times of Germany’s population.

If we compare it with some other developed economies of the world, and also large countries like India and China, the comparison is as follows:

Countries	Land Area (sq. km)	Population (million) – 2021 data	Japan’s land Area %	Japan’s Population %
USA	9,147,590	331.89	4.13%	37.87%
UK	240,822	67.33	156.96%	186.69%
France	547,557	67.75	69.03%	185.53%
Italy	295,717	59.11	127.82%	212.65%
Canada	8,965,590	38.25	4.21%	328.63%
S. Korea	100,410	51.74	376.46%	242.95%
Australia	7,692,020	25.69	4.91%	489,29%
India	2,991409	1,407.56	12.64%	8.93%
China	9,424,703	1,412.36	4.01%	8.90%

It is evident from the above figures that Japan’s population density is the highest among the developed countries and the two largest developing nations. i.e., India and China.

While this high population density results in very high land prices in the large metro areas of Japan, it also requires more high-rise buildings and, hence, higher construction costs.

Very Low Self-Sufficiency for Energy

Japan’s energy self-sufficiency is extremely low compared to most other developed and large developing countries.

As per the 2020 IEA (International Energy Agency) data, Japan’s total energy production, including all energy sources from conventional to nuclear to renewable, was 16.50% of its total energy production.

The following table shows the comparison of energy self-sufficiency of some of the developed economies as well as large countries like India and China:

Country	Total Energy Consumption (PJ)	Total Energy Production (PJ)	Energy Imports (PJ)	Energy Exports (PJ)	Energy Production as % of total consumption
Japan	11009	1816	14941	497	16.50%
USA	61178	90437	19852	23244	147.83%
Germany	8955	4096	8981	1356	45.74%
UK	4775	4900	4743	2929	102.62%
France	5778	5019	5339	1156	86.86%
Italy	4498	1474	5485	1060	32.77%
Canada	7957	91682	3192	12768	1152.22%
Australia	3377	18950	2088	15169	561.15%
South Korea	7313	2206	12392	2585	30.17%
India	24974	23781	16276	2623	95.22%
China	91352	117061	36961	3926	128.14%

Note: 1 PJ (petajoule) = 10¹⁵ joules (1 million billion joules).

From the above table, we can see that though 4 countries, including Japan, South Korea, Germany, and France, have energy production less than 50% of the consumption, Japan’s import percentage is the highest.

The energy cost affects the cost of everything, and Japan’s very high dependence on energy imports positively correlates with the cost of living in Japan.

Apart from energy, Japan is highly dependent on imports for other natural resources like metals, minerals, and rare earth metals required by high-tech manufacturing industries.

Very low calorie-based self-sufficiency

Japan has an extremely high dependency on food imports. The calorie-based food self-sufficiency rate in Japan in 2021 was 38%. This results in Japan importing over 60% of the food it needs.

While the increased cost of imported food directly impacts the cost of living, another interesting point is that Japan’s highest level of food import, at 23% of the total imports, is from the USA.

The remarkably high level of imports from a distant developed country with higher costs further increases food prices in Japan.

Remarkably high service levels and high efficiency

Japan is famous for its remarkably high-quality service levels. You can witness the unmatched level of service everywhere, be it a bank or public transport, supermarket, or government department.

Japan is also famous for its efficiency levels, not just its service and convenience levels. For example, you can witness the efficiency of the trains running like clockwork to almost everything.

Well, you get what you pay for. The high service levels, convenience, and efficiency automatically increase the prices of products and services and directly impact Japan’s cost of living.

Remarkable quality consciousness

While Japan is infamous for a very low productivity rate and very high go-to-market time, one of the main reasons behind both these drawbacks is the very high-quality consciousness.

The habit of receiving quality also makes Japanese people willing to pay more for better quality. Overall, like the impact of service levels, Japan’s high quality of products and services also increases the cost of living.

Incredibly detailed maintenance levels

The cost of maintaining public infrastructure and everything else is extremely high in Japan. You will rarely see a cracked road or a chair or table at railway stations or airports with even a tiny amount of paint coming out.

Vulnerability to Natural disasters

The vulnerability to natural disasters in Japan can affect the cost of living in various ways.

Japan is in a seismically active region and is prone to earthquakes, tsunamis, typhoons, volcanic eruptions, and other natural disasters. These disasters can, directly and indirectly, affect the cost of living. Following are some of such key factors:

1. Infrastructure costs: The constant threat of natural disasters necessitates that Japan invests heavily in infrastructure to ensure the safety and resilience of its cities and towns. Buildings must be designed to withstand earthquakes and other hazards, increasing construction costs.
2. Insurance costs: The risk of natural disasters in Japan increases the demand for insurance coverage. Homeowners, renters, and businesses are more likely to seek protection against potential losses from earthquakes, tsunamis, and other disasters. This heightened demand drives up insurance premiums.
3. Recovery and reconstruction expenses: Significant resources are required for recovery and reconstruction efforts after a natural disaster strikes. This can lead to increased taxes or government spending.
4. Business continuity costs: Companies operating in disaster-prone areas need to invest in disaster preparedness, which may include maintaining backup facilities, implementing redundant systems, the possibility of temporary disruption of supply chains, and ensuring adequate insurance coverage.

All the above factors directly or indirectly contribute to increasing the cost of goods and services, thereby increasing Japan’s overall cost of living.

However, it’s important to note that the country has developed advanced disaster management and preparedness systems to minimize the impact of natural disasters. As a result, Japan can often recover relatively quickly from disasters and maintain a high quality of life for its citizens.

Aging and Declining population

With a shrinking workforce, the country faces labor shortages and reduced productivity, contributing to higher prices for goods and services. The increased demand for healthcare and social services for older people puts an additional burden on public resources, potentially resulting in higher taxes and the overall cost of public services.

What is Cheap and What is Not?

The following guide gives you a better insight into making and reviewing your budget in Japan. First, let’s see what is expensive and the options to save costs.

Local Foods and Drinks Are Cheap

Supermarkets in Japan are expensive, especially if you are looking for international brands. However, you can find essential items from local brands at quite affordable prices. 

While some fruit runs a bit pricey, supermarket vegetables, meats, rice, bread, noodles, seafood, eggs, milk, and condiments are often very well-priced, with discounts, sales, and point systems to add extra value. If you’re willing to cook, your daily expenses will decrease dramatically.

Apart from the supermarkets, you can find local shops in your neighborhood, which are run by merchants usually selling essential items such as seasonal fruits and vegetables. The prices at such shops are usually much lower than at the supermarkets.

The countryside is much cheaper with good farm markets, and certain regions are known for products usually sent to stores in metropolitan areas. You can visit such countryside places to buy in bulk if you have a car. 

Saving Money with Hundred-Yen shops and Co-op Deli

There are many 100-yen shops in Japan, such as CanDo, Daiso, and Seria. These shops specialize in unique kitchen goods, gadgets, and basic household goods, including even decoration items.

You can cut down costs by selectively shopping at these 100-yen shops for any daily-use items where durability is not the prime objective.

Co-op Deli is another option where you pay a one-time membership fee, and they provide an extensive listing of food items and other items such as blankets, cleaning goods, etc. 

You can even order heavy items such as bottled water or soda boxes for delivery to your residence. Co-op Deli can be an economical and convenient option, especially if you have a family.

Imported Items Are Not for Everyday

A taste of home is going to cost you dearly! Imported items like cheese, meats, chocolate, beer, seasonings, etc., can run up to absurd prices and put a large dent in your savings.

Even foods made in Japan, such as pizza from outlets like Domino’s, Pizza Hut, and KFC, are pricey for one reason or another. So, either learn to live without them, switch to the Japanese versions, or be willing to readjust your budget! Most imported wine, however, is very well-priced.

Eating Out in Japan

Eating out, especially during lunchtime

Many restaurants are affordable, including some high-end places offering lunch deals with Teishoku Setto (set menus). 

Many offer large portions with free unlimited servings of rice, or Okawari Muryo is a must-try!  Please take advantage of it because dinner prices will tend to be more expensive at these same places. 

There are also ‘one coin’ or ¥500 Bentos (lunchboxes) alternatives to convenience stores, called combini in Japanese. In addition, television programs showcase places that serve very large or omori portions at very low prices. 

It is best to go with colleagues and friends who know about these hot spots but expect long lines during peak hours. If you don’t have a set time for lunch, usually noon, beat the rush and go after the lunchtime crowd. Most of these restaurants don’t take reservations for lunchtime and are first come, first served.

Dining out in Leisure Time

While you have very expensive high-end restaurants, you can have several very affordable options for dining out with good food and a lot of fun.

Such options can be surprisingly cheap compared to places like Europe or Australia, with all-you-can-eat Yakiniku for under ¥3,000, all-you-can-drink alcohol for ¥2,000, and other super-thrifty steals around every corner! Alcohol from supermarkets and convenience stores is also dirt cheap, making Japan a place to have fun and go out without breaking the bank.

Family Restaurants in Japan

Family restaurant chains such as Gusto, Jonathans, Royal Host, and Dennys are well known for their wide selection of inexpensive dishes.

Some other restaurant chains, like Yoshinoya, famous for Gyudon, or stewed slices of beef on rice and Matsuya, are inexpensive. These places are often open 24 hours and are very popular.

If you are in a hurry, there are many Tachigui or eat-while-you-stand soba shops for quick and cheap food.

Whether you are single or have a family, there are ways to keep expenses down without sacrificing quality.

Travelling is Expensive 

One may assume that by living in Japan, you will have ample free time to explore the country on weekends and holidays. However, once you stop being a tourist and lose the privilege of the Japan Rail Pass, you will soon realize that travel in Japan is not for those on a budget.

The Shinkansen bullet train is the biggest offender, generally costing over ¥10,000 for a 2-hour trip. However, there are always more affordable options, such as normal trains and intercity buses.

Even local trains in Japan are not cheap. For example, a 35-minute train ride between Yokohama Station and Shinjuku Station would cost ¥570 one-way!

However, please note that you can always save money by going by a surface train (JR) instead of using a subway in Japan. Also, please note that for any routes requiring a change of trains, using a combination of JR and subways may be more expensive than sticking to only subways or JR lines.

And don’t think that you’ll save money by getting on the roads. Not only is buying and owning a car extraordinarily costly in Japan, but the ubiquitous toll roads and the additional price of gasoline also make them quite expensive. The good point is that one does not need a car in big cities because of the extensive and efficient public transport systems. 

Much of Your Paycheck Will Go Toward the Rent 

In Japan, the average price for one room, one kitchen, and one dining room apartment was ¥48,778 in 2019.

However, this price can vary dramatically depending upon the location, with average apartment prices in Tokyo (often very small) being ¥68,774 for a studio apartment, while those in Tottori Prefecture are just ¥39,274.

The price will fluctuate substantially even within cities, with rent in Tokyo’s esteemed Setagaya City averaging ¥99,000 per month for 1K apartments. Generally, you’ll want your rent to be a third of your after-tax income. Unfortunately, even if you have the funds elsewhere, most real estate agencies will follow the ⅓ rule, and getting a place above your pay grade is next to impossible.

However, if your place of work is in a big city, you can save a lot of rent money by opting to live in the outskirts instead of downtown. Public transport is always efficient and highly frequent in and around the big cities of Japan, and you will find that commuting slightly more is worth the money you save. Moreover, staying in the outskirts does not make much difference when most companies have a hybrid, work-from-home, or even work-from-anywhere work culture.

You may like to check out our detailed guide about renting an apartment in Japan and how to choose your neighborhood in Japan.

Putting It All Together

Even with all this considered, you may still wonder whether you can afford to live in Japan. 

According to the Ministry of Internal Affairs and Communications, the average monthly expenditure for singles in Japan was ¥155,912. The following is a breakdown of average expenses for a single person in a month:

• Rent: ¥45,000 – ¥65,000
• Utility Bills: ¥7,000 – ¥10,000
• Food: ¥25,000 – ¥40,000
• Phone and Internet: ¥8,000 – ¥12,000
• Travel: ¥10,000 – ¥20,000
• Miscellaneous: ¥15,000

*Guide according to LINE MOBILE.

However, please note that expenses vary from person to person, and the above figures are to be considered a minimum.

There are many bundled services where you can pay for your gas and electricity together with the provider. The best is to research these online and take advantage of plans offering upfront discounts and lower monthly costs afterward.

Simulations can be performed online to compare estimated spending. Tokyo Electric Power Company (TEPCO) is the leading provider in Japan and is expensive. In addition, some people will limit indoor units and prefer gas or electric heaters in winter and fans in the summer.

How Much Money Should I Bring to Japan?

When starting in Japan, expats should have a well-topped-up savings account and cash. In fact, many applying for working holiday visas must prove they have at least 200,000 yen in savings before receiving permission.

However, when considering rent startup costs, monthly expenditures, and other things, you should aim to bring at least 500,000 yen to Japan, assuming you already have a job lined up and don’t plan on spending months job hunting. 

Japan is Expensive – But Doable!

As you can see, Japan is an expensive country to live in! However, it’s far from impossible for even those on a tight budget to build a great life in a nice area while still traveling and saving money.

There are many workarounds. The longer you live in Japan, the more you learn ways to cut corners and minimize expenses while maintaining a quality of life. It is also worthwhile to get invaluable tips from others.

I hope this guide has clarified some basics about the cost of living in Japan and will help you decide to move to Japan!

Further Readings

With your interest in knowing about the cost of living in Japan, you may also be interested in knowing about the following:

• Cost of living in Tokyo
• Rents in Tokyo
• Living in Tokyo Vs. Osaka
• Living in Kyoto
• Cheapest rents in Japan
• Living in Saitama
• Living in Chiba
• Living in Kanagawa

You may also like to read about the year-end tax adjustment in Japan.