Falling Japanese Yen Helps U.S. Servicemembers in Japan Who Lost Their COLA

Many personnel in USFJ lost their cost of living allowance (COLA) and the falling yen is helping to soften the financial blow for these service members:

 Japan’s plunging currency is softening the impact of inflation on American military personnel stationed in the country, even as the government cuts their allowances.

A dollar bought just over 149 yen on Monday for the first time in 32 years and was hovering around that level Tuesday evening. The yen has dropped 23% against the dollar this year as Japan continues to keep interest rates near zero.

In contrast, the U.S. Federal Reserve has raised its benchmark interest rate at each of its past three meetings, most recently in September, bringing the rate to between 3% and 3.25%, the Wall Street Journal reported Thursday.

A higher interest rate is expected to slow inflation, but by promising higher yields it also attracts investment to the United States, which strengthens the dollar compared to other nations’ currencies.

The strong dollar is welcomed by U.S. service members in Japan, most of whomhave hundreds of dollars less to spend each pay period due to cuts in their cost-of-living allowance this month.

Most are no longer receiving COLA — tax-free money to help offset the costs of living in expensive areas overseas — following changes announced by the State Department on Oct. 1.

Stars & Stripes

You can read more at the link.