From October 11, the most discouraging restrictions were removed and Japan re-opened to inbound tourism. Prime Minister Fumio Kishida says the foreign arrivals are well worth the risks, seeing as they are projected to bring with them an economic windfall of as much as ¥5 trillion.
Around 30 years ago, recalls Nikkan Gendai (Oct 21), the yen briefly soared to its all-time peak of over ¥80 to one U.S. dollar, and at that time Japanese who traveled to Asia countries marveled at how inexpensive goods and services were.
Likewise with a stronger yen, such foreign brand items as Nike and adidas shoes, and Apple's iPhone, became competitive on the domestic market.
But now with the shoe on the other foot, the depreciation of the Japanese yen is likely to stimulate more shopping by foreign visitors.
According to data from the Japan Tourism Agency, based on a survey conducted on September 21, the top five countries where potential travelers said they're planning to visit to Japan were South Korea, Thailand, the U.S., Malaysia and Australia.
All five of the above have benefited to some degree from exchange rates. Compared with the exchange rate current in October 2019, the Japanese yen has fallen by 40% against the U.S. dollar. Moreover both the New Taiwan dollar and Chinese yuan have risen by 30% vis-a-vis the Japanese yen. The South Korean won gained in value by more than 10%.
During the pandemic, Taiwan's economy in particular boomed in terms of exports (a 29% year-on-year gain from 2020 to 2021) and imports (a 33.2% gain over the same period), with overseas demand particularly strong for microchips and other industrial products.
From October 13, Taiwan's authorities finally relaxed travel restrictions. In 2019, the year before the pandemic, Taiwan ranked third in foreign visitors to Japan with 4.89 million people, after China (9.59 million) and South Korea (5.58 million). Considering Taiwan's population of around 24 million, this figure is all the more impressive, as it corresponds to more than one out of every five Taiwanese visiting Japan.
In terms of 2019 spending on a per capita basis, visitors from mainland China led the pack, with an average outlay of ¥212,810. China was followed by Singapore (¥173,669 per person); Hong Kong (¥155,951); Malaysia (¥133,259); Thailand (¥131,457); Taiwan (¥118,288); and South Korea (¥76,138).
Currently, however, travelers from mainland China are still subject to various restrictions, which means Taiwanese visitors are likely, in the short term at least, to represent a considerably larger percentage of total arrivals.
According to a survey of 5,000 Taiwanese conducted by Japan's Ministry of Agriculture, Forestry and Fisheries, the most popular items purchased by visitors to Japan were confections, dairy items and fruit," says the operator of "Le, Chi, Gou" (enjoy, eat and shop), a Chinese-language site on the web that appeals to visitors to Japan.
The popularity of Japanese sake (rice wine) and Japanese green tea among Taiwanese visitors also boosted direct imports. After Taiwan halved its 40% import duty on sake and other products to 20%, local supermarkets began stocking it on their shelves.
According to a staff at the Hokkaido prefectural office, a company is working with the city of Sapporo on a joint project to expand sales to visitors.
"Hokkaido attracts many tourists from Asia, and products such as dairy items, rice and seafood have been strong sellers," he said. "However, primary products alone will not be enough to overcome the declining population in Japan in the future, so we are also making more efforts to promote Japanese food culture itself, such as by packaging furikake (condiments) together with rice."
With the exception of No. 1-ranked China, whose preferred item among visitors was perfume and cosmetics, the top item choice among the six other Asian countries and regions was confections. Items of apparel also scored high among all nationalities except South Korea.
A popular Thai-language site called Chiru-chiru Japan predicts that the favorable exchange rate is likely to see more purchases by visitors from that county, with some laying out 2 million yen or more for high-ticket items such as wristwatches.
The unstoppable depreciation of the yen may be a cause for concern, concludes Nikkan Gendai, but at least those excited over the windfall from inbound travelers may find it reassuring.© Japan Today