I'm planning a holiday in Japan for about 3 weeks in July, 2009. However, I'm given pause by news media reports about how expensive Japan has become for travelers, due to global finanacial crisis and surging yen. These reports suggest that already expensive country has now been put out of reach of the typical tourist. Any recent reports would be great. Thank you/arigato.

Local prices in Japan had been basically stagnant since around 1990, so it is not that expensive.

Sure, the yen has surged like 20% against the USD in 2008, but that's just 20%.

If you have been to Japan in the last 5 years or so and are from the States, then I don't think you will find much difference in prices in $ terms. True, yen has risen against all currencies but more modestly against US$, and given Japan's low inflation, the differences are minimum.
If you come from a country whose currency has slumped against yen, like UK, Australia, NZ and S Korea, you will notice a big change - nearly double the price of 18 months ago.
As Japan itself experiences economic downturn and a slump in consumer demand, many businesses are having to cut prices or offer better values in order to maintain market share, so travellers should benefit.

We were in Japan over the summer. The Yen was quite weak at that point, but I didn't find it that expensive, even adjusting for the recent run-up. Certainly no more expensive than much of Europe.

We found food to be pretty good value, and hotels weren't that ridiculous. For example, we stayed at the Westin in Kyoto for JPY 22k per night. Used points for most of the other nights, but I don't remember the pricing being that out of hand.

I was in Japan about six weeks ago. Food and admission prices seem to be about the same as the last several years.

Hotel rates (in yen) in Tokyo seemed a bit high, so I used hotel points.

A 20% drop in the value of the dollar means that prices (in dollars) rise 25%. So, in theory, a $1600 vacation (not including airfare) now costs $2000.

Get away from the big cities and prices are better (e.g. a night at an onsen hotel with double bed, breakfast and dinner buffets, no charge for the onsen, came to about 12,000 yen, in Kyushu).

You can still take a trip to Japan for $1600 (for 20% less yen), just stay at less expensive hotels and spend some time away from Tokyo and Kyoto.

Thank you all for these helpful and encouraging comments.

our family is going to japan July 09' also.
I went through vrbo.com as we wanted apt. rental and found it very reasonable as we have a family of 5. I did not find it bad $289 to $309 USD per nite (average)