Tokyo 'most expensive expat city'

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London has plummeted in the rankings from third to sixteenth

Tokyo has knocked Moscow off the top spot as the world's most expensive city for expatriates, a survey suggests.

The strengthening yen meant the Japanese capital now had the highest cost of living, followed by Osaka, said data firm Mercer.

A weaker pound pushed London, the third most expensive city in 2008, to 16th.

The survey is aimed at firms thinking of sending workers abroad and looks at more than 200 factors, including the cost of housing, transport and food.

The index uses New York as its benchmark for living costs.

MOST EXPENSIVE EXPAT CITIES (LAST YEAR'S RANKING) 1. Tokyo (2) 2. Osaka (11) 3. Moscow (1) 4. Geneva (8) 5. Hong Kong (6) Source: Mercer

Johannesburg was the cheapest of the 143 cities surveyed, driven by the sharp decline of the South African rand against the US dollar.

However, the BBC's Jonah Fisher in Johannesburg says that for local residents, costs are rising, with even basics such as bread becoming more expensive.

Meanwhile in Japan, the BBC's Roland Buerk said that Tokyo's top slot in the ranking would not surprise locals, who could find themselves paying $15 for a watermelon and $25 for a mango.

'Essential'

Currency fluctuations resulting from the economic downturn had led to a "significant reshuffle" in this year's rankings, said Nathalie Constantin-Métral, a senior researcher at Mercer.

And she said that, as firms looked to control costs, keeping track of the factors that dictated the cost of living for staff it sent overseas was "essential".

LEAST EXPENSIVE EXPAT CITIES Johannesburg, South Africa Monterrey, Mexico Asuncion, Paraguay Karachi, Pakistan Wellington, New Zealand Source: Mercer

"With significant exposure to multiple economies and currencies, multi-national companies continue to be greatly affected by the financial crisis," she said.

"It is important for multi-national companies to continuously benchmark against their peers to ensure compensation packages are fair and in line with the rest of the market."

European cities have seen some of this year's steepest falls in the ranking system.

The Polish capital, Warsaw, plummeted from 35th to 113th, while Glasgow (129th) and Birmingham (125th) have fallen 60 and 59 places respectively.

Last month, a survey by human resources firm ECA International which looked at a wider range of cities, said Angola's capital, Luanda, was the most expensive in the world for foreign workers.

It found that a meal there could cost more than $100 and a "decent" apartment could be as much as $15,000 a month, despite the fact that most Angolans live in poverty.