The Numbers Come First
One dollar bought approximately 159.05 yen on Wednesday. According to Geoff Yu, a senior strategist at Bank of New York Mellon, that rate is wildly out of step with reality — at least when reality is measured in katsu curry.
Yu created the Katsu Curry Index as a purchasing-power-parity (PPP) gauge built around the price of Japan's ubiquitous pork-and-rice dish. His calculations, drawn from prices at CoCo Ichibanya — the world's largest curry-rice chain, with around 1,500 outlets globally — suggest the dollar should buy just 62.18 yen if the two currencies were fairly valued against each other.
That is a gap of nearly 97 yen per dollar. For context, the better-known Big Mac Index — The Economist's long-running PPP benchmark — puts fair value at 80.30 yen to the dollar, itself a dramatic divergence from the market rate.
Why Curry, Not Burgers
Yu's methodological argument is straightforward. The Big Mac has been a global fast-food staple for decades, he said, but it is still consumed 'far more in the West than in the East.' Curry rice, by contrast, functions as everyday comfort food across Asia, making it a more culturally accurate price anchor for Japanese consumers.
He uses CoCo Ichibanya specifically because its standardized menu and broad footprint allow for a clean international price comparison — the same logic that made McDonald's the original PPP vehicle of choice.
Intervention Fades, Pressure Returns
The index lands at a sensitive moment. Japanese and U.S. authorities recently staged what the source describes as the most dramatic currency intervention in 15 years, pulling the yen back from its lowest level against the dollar in four decades. The yen has since surrendered half of those intervention-driven gains.
The episode underscores a structural problem: intervention buys time, not equilibrium. When the underlying policy gap between the Federal Reserve and the Bank of Japan remains wide, market gravity reasserts itself.
'If the price of a katsu curry, or a bowl of ramen, becomes prohibitive in Japan, it will probably lead to growing calls for a policy change,' Yu said.
What the Market Is Telling Tokyo
For ordinary Japanese, the weak yen is not an abstraction. Overseas travel and imported goods have become expensive, but the currency's slide is now hitting domestic wallets too — raising prices for meals, services and consumer goods across the board.
The Katsu Curry Index joins a growing family of alternative PPP measures: the Tall Latte Index tracks Starbucks prices globally, while the KFC Index was developed to capture PPP in Africa, where the Big Mac has limited reach.
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The editorial read here is simple: capital rewards clear rules, and currency markets are the most unforgiving rule-setter of all. A 97-yen gap between the market rate and purchasing-power fair value is not a rounding error — it is a policy indictment. Intervention can move the needle for a few weeks; only credible monetary discipline closes a gap that wide. Until Tokyo and Washington align on the structural drivers, the yen's weakness will keep taxing Japanese consumers at the dinner table, one bowl of curry at a time.
