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Monday, May 25, 2015

Japan's Economic Boost From Foreign Tourism

Above, souvenirs for sale at Asakusa's Nakamise Street. Photo by Armand Vaquer.

Japan's economy has been in the doldrums since the "bubble" burst back in the early 1990s. So it stands to reason that the benefits that the boom in foreign tourism is giving the country a big shot in the arm.

According to Tourism-Review:
Foreign visitors' spending in Japan skyrocketed to an all-time high in what may be the past two decades. This ultra-high spending has added about 0.1 percent points to the gross domestic product. If you think the change is small, then re-think. For an economy that has been crippled to dormancy for a very long time, a positive change of 0.1% in GDP is not a small achievement! 
According to Yuichi Kodama, who is an economist at Tokyo's Meiji Yasuda Life Insurance, Japan can effectively seep into the rising purchasing power of the Asian market through foreign tourism. He attributes this to the declining local population that has led to a decrease in the domestic demand. Thus, the domestic market cannot be looked up to for substantial economic gain. 
The economic boost from tourism in Japan has been influenced by two major factors – China and the dwindling Yen.
It was only a scant few years ago that I blogged how the Japanese tourism industry will rebound once the foreign exchange rates between foreign currency and the Japanese yen become more favorable to potential foreign visitors. Back then, the exchange rates between the U.S. dollar (to give an example) were down around 80 yen. Today, the dollar and yen exchange rate is around 120 yen.

Read more at http://www.tourism-review.com/tourism-helping-the-stagnant-japanese-economy-news4568#AuMRJxfWMiGLB0mk.99

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