Foreign Tourist Spending Down In Japan In July

Above, the food area below the Tokyo Skytree. Photo by Armand Vaquer.

While the rising Japanese yen hasn't dampened the record numbers of foreign visitors to Japan, it has put a dent in the amount of spending by those visitors. This is part of the lingering effects of Brexit.

According to Financial Times, spending has fallen "by a fifth year on year in July" despite the record number of visitors. This may prompt the Japanese government to take action to weaken the currency.

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Brexit: Japanese Travel Companies In Wait-And-See Mode

Above, Kyoto Tower. Photo by Armand Vaquer.

The Brexit matter has thrown a lot of things in flux. Nobody knows what's going to happen economically, socially or even with travel.

The Japan News (Yomiuri Shimbun) reported that travel companies are taking a wait-and-see stance for now.

They wrote:

Travel companies in Japan remain uncertain of how Britain’s departure from the European Union will impact them. 

Unlike Germany, France and some other nations, Britain has not signed the Schengen Agreement, which allows people to move freely within the member countries without the use of a passport. Thus, the passport requirement for traveling from or to Schengen member countries will remain unchanged. 

“There will be no newly imposed restrictions on free movement in the wake of the latest development. So I doubt the number of [Japanese] tourists [to Europe] will drop,” said Toshiro Yajima, the head of public relations at the Japan Association of Travel Agents. 

But Yajima said that if Japanese companies withdraw from London and other parts of Britain, demand for business trips might decrease.

Meanwhile, this shouldn't affect tourism to Japan as they aren't a part of the turmoil in Europe. But, the dollar did take a big hit against the yen in Tokyo trading Friday in Brexit's aftermath, plummeting briefly below ¥100. It is currently at ¥102.

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Markets Tumble Over Brexit News

Yesterday's Brexit referendum in the United Kingdom sent market prices tumbling worldwide today.

According to Bloomberg:

The world’s 400 richest people lost $127.4 billion Friday as global equity markets reeled from the news that British voters elected to leave the European Union. The billionaires lost 3.2 percent of their total net worth, bringing the combined sum to $3.9 trillion, according to the Bloomberg Billionaires Index.

The DOW dropped 610 points (-3.39%) in today's trading over the news that British voters voted to pull out of the European Union. My own retirement investment account lost 1.513% of its value.

However, this is just the initial reaction by jittery people. Over the long term, U.S. markets should benefit as the European Union crumbles (five more countries are contemplating exiting the EU). World investors would then turn to U.S. markets as they would see them as safer and stable.

We'll see how things go when the markets open again on Monday.

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