Tokyo and Hong Kong are now Asia Pacific’s two most expensive locations for expatriates, respectively, according to the findings of the latest Cost of Living survey published by ECA International.
Tokyo rose from 7th place in the regional rankings last year, while Hong Kong is up two places from last year’s 4th position in the regional rankings. Shanghai, which was ranked as the most expensive location for expatriates in the Asia Pacific region a year ago, has moved down two places to the 3rd most expensive.
To ensure that an employee’s spending power is maintained when they are sent on international assignment, a cost of living allowance is often provided as part of the pay package. This allowance will be affected by differences in inflation levels as well as exchange rate movements between that employee’s home and host country.
“The appreciation of the yen in recent months against other major currencies is a significant reason for this rise in the rankings,” said Lee Quane, Regional Director – Asia, ECA International. “This means that for many companies, the cost of maintaining their assignees’ purchasing power while posted there has increased.”