Falling yen is great for 2 sectors in Japan

More tellingly, global sales of fashion and leather goods – LVMH’s biggest division – to Chinese customers in their home market and abroad rose 10 per cent, indicating that spending by Chinese tourists overseas helped offset weak sales at home. A large portion of their spending abroad was in Japan.

The plunge in the yen – which stems from the large interest rate differential between Japan and the United States – has been a boon to Japan’s tourism industry by boosting the spending power of overseas visitors. It has also increased the appeal of Japanese commercial property.

According to data from MSCI, Japanese retail and hotel properties are among a handful of segments of Asia’s commercial real estate industry in which investment activity last year was on a par with, or exceeded, the average annual level of transaction volumes in 2020-2022.

Benjamin Chow, head of real estate research for Asia at MSCI, said the strong performance of the retail sector was “all the more striking given that Japan has a declining population, something investors don’t like”.

05:34

Japanese cherry blossoms faced with the threat of climate change may disappear by 2100, study says

In an April 12 report, Bank of America noted that the markets in Asia where inbound tourism recovered fastest were those with the sharpest depreciation in local currencies, such as Japan and Vietnam.

Moreover, while the number of Chinese tourist arrivals in Japan remains significantly below pre-pandemic levels, Chinese tourist spending per head last year was 50 per cent higher than in 2019, driven by higher spending on luxury goods and high-value cultural experiences.

The plunge in the yen has created a rare opportunity for foreign tourists to purchase coveted luxury goods at a