Tokyo has overtaken Luanda, Angola, as the world's most expensive city for overseas staff after the cost of imported goods rose in the wake of last year's earthquake.
An annual cost of living report, released Tuesday by U.S. consulting firm Mercer, showed several Japanese cities had moved up in the rankings after the yen strengthened against the U.S. dollar.
Two other Japanese cities rank in the top 10: Osaka comes in third with Nagoya in 10th place. Elsewhere, Luanda drops to second, Moscow is forth, with Geneva in fifth place.
Researchers looked at 214 cities around the world, analyzing data from March 2011 to March 2012.
"We compare the cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment," senior researcher Nathalie Constantin-Métral said in a video on the company's website.
The survey uses New York City, which dropped one spot to 33rd on the list, as their base city when evaluating foreign cities.
As a result of the on-going European financial crisis, many cities across Europe fell in the rankings. London dropped seven spots to 25th this year, while Paris moved down 10 spots to No. 37.
"Countries badly hit by the Eurozone crisis, including Greece, Italy and Spain, have also experienced drops in rental accommodation prices," Constantin-Métral said in the report. In Italy, Milan dropped 13 spots, while Rome fell eight spots to No. 42.
By contrast, cities in Asia and the Americas moved up as their currencies strengthened.
The cost of housing remained the strongest indicator for the cost of living in all cities.