Why you should care
Because a weak yen is driving the country’s travel boom.
Tourist spending in Japan surged to a record 4.4 trillion yen ($40 billion) in 2017 as the weak yen drove the nation’s travel boom to new heights.
Spending rose 17.8 percent in the previous year, with every quarter in 2017 setting a new record, according to data released by the Japan Tourism Agency.
Japan reached its goal of 20 million annual tourists by 2020 five years early.
Inbound tourism has been one of the strongest sources of growth for Japan’s economy in recent years. Fueled by a weak yen, the figures suggest the tourist boom still has some distance to run.
“They’re bullish results,” says Akihiko Tamura, commissioner of the Japan Tourism Agency. “The framework we’ve been pursuing has borne a certain amount of fruit.”
Tourists used to regard Japan as too expensive and troublesome to visit. After 20 years of on-and-off deflation, it is more affordable …
Tamura notes the reliance on Asian visitors. “It would be good if we had a slightly wider range of countries and regions visiting. We have to increase the number of visitors from Europe, the U.S. and Australia.”
Consumption by free-spending Chinese visitors rose 15 percent to 1.7 trillion yen — more than a third of the total — including 877 billion yen in retail purchases. Many Tokyo department stores have hired Chinese-speaking staff to cater to the influx.
Weakness in the yen, which traded below 110 yen to the dollar for most of the year, contributed to the rise in visitors from China. Japan may also have gained some custom after China banned tour groups from South Korea in retaliation for Seoul’s decision to host a U.S. missile shield.
The second- and third-biggest spenders were from Taiwan and South Korea, followed by visitors from Hong Kong, highlighting Japan’s popularity as a destination for its Asian neighbors who enjoy its food and modern culture.
There was also robust growth in visitors from Europe, the U.S. and Canada. Tourists used to regard Japan as too expensive and troublesome to visit. After 20 years of on-and-off deflation, it is more affordable, while its cultural and language quirks appeal to an ever more globalized world.
The government of Prime Minister Shinzo Abe has also put tourism at the heart of its growth strategy. Liberalization of tourist visas for Chinese visitors, in particular, has contributed to the surge in numbers.
Japan reached its goal of 20 million annual tourists by 2020 five years early, and with 28.7 million visitors in 2017, it is on its way to the new objective of 40 million.
After many decades in which Japan ran a large deficit in tourism, it now has a surplus on its travel account, contributing to the country’s broader current account surplus.
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