Tourists visiting Japan and the money they spent both climbed to a record last year as Chinese travelers shrugged off a weaker yuan to deliver a rare economic bright spot for Japanese Prime Minister Shinzo Abe.
Japan attracted 19.7 million tourists in 2015 who spent 3.5 trillion yen ($30 billion), according to data released Tuesday by the Japan National Tourism Organization and the government. The number of visitors from mainland China doubled to 5 million as they shrugged off a collapse in stock market prices and an11 percent fall in the yuan’s value against the yen since August.
“Tourism has been a positive presence that’s supportive of growth amid an otherwise stagnating Japanese economy,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd. “But to maintain this growth rate in 2016, Japan will need to attract even more tourists. And doing that as the global economy slows will be quite difficult.”
Boosting spending by tourists is one of the pillars for achieving the Abe government’s target of lifting gross domestic product to 600 trillion yen ($5.1 trillion) by 2020. With visitor numbers jumping 47 percent in 2015 to almost hit a goal of 20 million, the government last month increased that target to 30 million.
While Chinese travelers accounted for a quarter of all visitors last year, they were responsible for 41 percent of all tourism spending. That shopping frenzy — dubbed `bakugai’ in Japanese — was chosen as one of two words of 2015 by the U-Can New Words and Buzzwords Awards.
The total spending by all tourists was equivalent to 1.2 percent of nominal domestic private consumption at the end of the third quarter.
It is unclear if the massive growth can continue. Japan’s yen strengthened against the yuan and all other major currencies in the last six months, making accommodation and shopping trips more expensive, and China’s growth in 2015 was the slowest in 25 years, undercutting demand.
“The weaker yuan is definitely weighing on future expectations,” according to Sera.
This article was written by Yuji Nakamura from Bloomberg and was legally licensed through the NewsCred publisher network.