Last payday, Masaaki Usui had $1,462.38 transferred into a dollar account he recently opened at a city bank.
Of the 15 employees at International Scientific Co., a Tokyo-based venture capital firm, 14, including Usui, had part or all of their monthly salary for April paid in dollars. “It helps me save money,” said Usui, 26. “I will probably not change the dollars into yen because it’s still hard for me to spot a good exchange rate.”
In April, the Japanese firm started paying monthly wages in dollars to those employees who requested it “to help brush up the workers’ sense of international finances,” according to the company. In fact, the firm wanted to dispose of its surplus dollars, according to Usui.
Whatever the reasons, salary payment in dollars was one of the new areas opened up when part of the “Big Bang” financial deregulation measures took effect April 1.
Under the new Foreign Exchange and Foreign Trade Law, any business or individual is free to engage in foreign currency exchanges, payments and trading, whereas previously only Finance Ministry-authorized dealers were allowed to do so.
More than a month after the legal amendment, the impact on the average consumer’s daily life still appears to be negligible, but various foreign currency-related businesses are emerging. Discount store chain Bic Camera has set up a yen-dollar exchange booth at four of its shops in Tokyo and Yokohama, which together have attracted up to 200 customers a day, said Katsuhiko Asaka, a director at Bic Camera.
The discount chain had initially examined ways to make dollar payments possible on each shop floor, but has given up the idea to avoid “confusion and congestion at the cashiers,” Asaka said.
Kyoka Okazaki, a 17-year-old Tokyo high school student, came to one of Bic Camera’s Shibuya shops to change her $30 for 3,862 yen. “I was just running out of my allowance. I changed the dollars that were left over from my family trip to the U.S. last month,” she said.
Asaka said customers are finding the service “easy, convenient and speedy,” partly because the shops are open until 8 p.m. every day, while most foreign exchange counters at banks close at 3 p.m. on weekdays. “Considering the personnel costs, our money exchange business itself wouldn’t pay off. But the service has brought added value to the already convenient image of our shops,” Asaka said.
Papyrus, a discount ticket chain in Tokyo, has started buying bank notes in 14 currencies and coins in eight currencies. One of its shops also sells eight foreign currencies. “Unlike banks, here you don’t have to wait in a lobby just to change a few dollars,” said Toshikatsu Tatsuno, manager of the main Papyrus store in Kanda. “Besides, we accept coins and are open until 7 p.m,” he said.
However, one drawback of the new system is that when customers exchange their foreign currencies for yen at discount shops they get less than they would at bank counters. For example, the dollar buying rate at Bic Camera for April 30 was 2 yen lower than that set by the Bank of Tokyo-Mitsubishi, while at Papyrus it was 5 yen lower.
Restaurants, including Beer Station, which runs seven bars and eateries at the Ebisu Garden Place complex in Tokyo, have also started accepting dollar payments. “Some 100 groups of customers have paid in dollars at our restaurants so far. The total amount has been only about $8,000, ” said Kenji Iijima, general manager of Beer Station, adding that he will use the dollars to import beef.
The experience has also made him realize that foreigners live in the world of the credit card. “I first expected that the number of foreign businessmen and tourists coming to our restaurants would go up once we started accepting dollars,” he said. But foreigners have made up only 10 percent of those who have paid in dollars, Iijima said.
“We are offering a wider alternative to using dollars,” he said. “Previously, many Japanese tourists to the U.S. would make wasteful purchases in dollars before heading back home because keeping greenbacks in Japan was virtually useless unless you went to a bank and exchanged them.”
Other restaurants are following suit. Nangoku-tei, a Chinese restaurant in Tokyo’s Chiyoda Ward, added $5 “ramen,” or Chinese noodles, to its menu in April. While the shop charges 750 yen for the ramen, if a customer pays in dollars the same dish costs about 650 yen.
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