Not Thailand or China: The One Country Taiwanese Love Has the World's Lowest Cost of Living, Experts Reveal: Rent and Dining Are Incredibly Affordable

In recent years, Japan has become a top travel destination for many Taiwanese people. Visitors can enjoy high-quality experiences at relatively low costs, and this is not just a perception—it is backed by real data.

According to Deutsche Bank's latest 'Mapping the World' report, after 12 years of yen depreciation, Tokyo is undergoing a 'structural price reset' and has become one of the most affordable major cities globally.

Deutsche Bank conducts an annual large-scale survey covering 69 cities across six continents, analyzing cost of living and quality of life. This year's data shows that living expenses in major Western cities remain extremely high—Zurich and Geneva continue to top the list as the most expensive cities, while New York and San Francisco rank within the top five. In subjective quality-of-life rankings, Luxembourg remains at the top.

However, the most discussed development is Japan's dramatic shift.

What Is Cheapest in Tokyo?

Jim Reid, a strategist at Deutsche Bank, states that Tokyo has become a 'pricing lowland' among global major cities. The report highlights several concrete examples:

- Housing: The monthly rent for a 3-bedroom apartment in Tokyo is only about one-quarter of the cost for a comparable unit in New York. - iPhone Purchases: When taxes are factored in, Tokyo is currently one of the cheapest major cities in the world to buy an iPhone. - High-Value Dining: Dining out in Tokyo is cheaper than in Eastern European cities like Warsaw or Prague. Compared to New York or Zurich, restaurant expenses are reduced by approximately two-thirds.

While the rest of the world faces soaring prices and rising living costs, why has Japan become an 'unbelievably cheap' exception?

The core reason lies in the severe disconnect between yen depreciation and domestic inflation.

Reid explains that since 2012, the Bank of Japan has maintained an ultra-low interest rate policy for an extended period. Meanwhile, the U.S. and other major economies have continuously raised interest rates to combat inflation, widening the interest rate gap between Japan and overseas markets. During this time, the yen has depreciated by approximately 51% cumulatively, while domestic prices in Japan have risen by only about 20%.

This means that for individuals holding foreign currencies such as the U.S. dollar or Taiwan dollar, the prices of goods, services, and even real estate in Japan have effectively dropped significantly.

The exchange rate decline has far outpaced domestic price increases, leading to an extreme undervaluation of Japan in terms of purchasing power parity (PPP). This explains why foreign tourists and investors feel that Japan is 'truly cheap' right now.