Lee San Duo of booked a last-minute vacation to Japan this month, hoping to take advantage of the slumping yen. The timing of the Singapore resident could hardly have been better: the currency tumbled to a record versus Singapore’s dollar just a day before he flew out.
“Things are relatively cheaper and I’ve been spending more,” Lee, 29, said during his visit to the historic castle town of Kanazawa on the Sea of Japan coast. The sales executive said a weak yen allowed him to stock up on his favorite Burberry Group Plc designer shirts and other “expensive” items.
A record 11 million foreign tourists visited Japan in the first 10 months of this year, up 27 percent from the same period in 2013, with more than half from elsewhere in Asia, government data show. The tourism boom may signal a lower yen is starting to help the world’s third-largest economy, which last quarter slipped into its fourth recession since 2008.
The yen has depreciated against 27 of the 31 most-traded currencies since mid-year as well. Earlier this month it feel to a seven-year low of 121.85 to the U.S. dollar.
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The yen has lost about 30 percent of its value versus the U.S. dollar since December 2012, when Prime Minister Shinzo Abe came to power pledging to boost inflation and revive growth with his so-called three arrows policy, which included plans for an unprecedented increase to the monetary base.
Travel and tourism made up about 7 percent of Japan’s economy last year, and this year spending by overseas visitors will be 13 percent higher, according to the World Travel & Tourism Council.
For decades, developing nations from Thailand to Indonesia welcomed Japanese tourists eager to experience the region’s diving spots and tropical rain forests. Those countries are now returning the favor as increasingly wealthy Southeast Asian travelers boost consumer spending hit by an increase to Japan’s sales tax in April.
Ariya Tiranaprakij is another traveler taking advantage of the yen’s decline. The 46-year-old executive vice president of the Thai Bond Market Association said the exchange rate, together with a visa exemption for Thais, encouraged her to take three impromptu trips to Japan this year.
“Lots of my friends and colleagues went to Japan this year because of the weak currency and easy access,” Ariya said by phone this month after her most recent visit. “I also plan to exchange yen and keep it for my future trips. I will go to Japan again for sure and the rate now is so tempting.”