New Katsu Curry Index Highlights Deep Yen Undervaluation

Geoff Yu, a senior strategist at Bank of New York Mellon, launched the Katsu Curry Index, which measures the yen’s purchasing power through the price of a popular Japanese curry dish sold by CoCo Ichibanya. His analysis shows that, after accounting for local curry prices, the implied exchange rate should be about 62.18 yen per U.S. dollar, starkly lower than the current market level of roughly 159.05 yen. The more familiar Big Mac Index suggests an implied rate of 80.30 yen, but Yu contends that curry, being a staple across Asia, offers a more relevant benchmark than the Western-centric burger.

The index emerges as the yen rebounds from a dramatic intervention by Japanese and U.S. authorities, which temporarily lifted its value before half of those gains were lost. Yu warns that persistent yen weakness inflates the cost of everyday items in Japan and could spur public pressure for policy shifts. He notes that other alternative PPP measures exist, such as the Tall Latte Index for coffee and the KFC Index for Africa.