Monday, February 9, 2009

Strong Yen Impact for Japan made items

The strong Japan Yen may had effect the pricing of Japan made spare parts globally including Malaysia, all the Japan made items had increase the price for more than 15% due to the effect of currency rate.
Though the consumer may need to folk out more money for Japan item, but the impact for Japan ecomony, especially for their exporter and tourism industry may as well hit badly, below are one of the article that how the strong Yen hit Japan.
By now you’ll be well aware that the strong yen is crippling Japanese exports, and by extension the economy as a whole, but less widely discussed is the impact this is having on Japan’s tourism industry.

With Japanese firms having shifted so many manufacturing jobs to China in recent years, and with an ageing and shrinking population limiting the performance of domestic demand, tourism is one sector which could – or should – be doing more for Japan’s economy. Japan is the only G-7 country that is not in the top 10 in terms of worldwide tourism arrivals, and the authorities have set a goal of attracting 10 million arrivals annually by 2010 and 20 million by 2020.

Japan’s underperformance in tourism arrivals is in some ways surprising, given that it has something appealing for almost everyone. Historically-minded travelers would appreciate its 2,700-year history, thousands of shrines and temples, the old Imperial capital in Kyoto, and the reminders of Japan’s militarist past at the Yasukuni museum. Landscape lovers might appreciate sweeping volcanic panoramas, Mount Fuji, and world-class skiing. More modern-minded visitors have Japan’s urban vibe – the neon signs, skyscrapers, and high-tech gadget shopping – while food lovers will appreciate anything from tiny eight-seater eateries and the highest urban concentration of Michelin-starred restaurants. Then there are plenty of manga and computer games-related merchandise. Finally, Japan houses the Tomb of Christ, up in Aomori Prefecture (Dan Brown/Robert Langdon, please come and visit!).

Despite these strengths, there are a number of weaknesses constraining the growth of Japan’s tourism sector. For Westerners, Japan is a minimum of 10 hours’ flight, making it expensive to get to. For everyone, Japan tends to be expensive even when the yen is not at record highs. Then, there is the fact that not many people in Japan speak foreign languages, making it potentially tricky to navigate around. Finally, there is some evidence that Japanese hotel owners feel uncomfortable with more foreigners visiting.

Nonetheless, the year 2007 saw a record 8.4 million visitors come to Japan, up 14% on 2006. The key driver has been visitors from Asia – especially China and South Korea – who made up 73% of that total. Relations between Tokyo and Beijing and Seoul have hardly been smooth in recent years, but this apparently has not gotten in the way of tourism.

The Land Of The Rising Holiday CostsFull-year 2008 figures are not available, but statistics provided by the Japan National Tourism Organisation (JNTO) reveal that the months of August, September, October and November in 2008 saw y-o-y visitor declines of 2.0%, 7.0%. 5.9%, and 19.3% respectively. Unsurprisingly, the countries registering the biggest declines in visitors to Japan have been South Korea, the US, and UK, all of which have seen their currencies plunge against the yen.

In practical terms, here is what the strong yen means: if you arrive in Japan at Tokyo’s Narita Airport and take the Narita Express train into downtown Tokyo, the ticket will cost 2,940 yen. A year ago, with the sterling-yen exchange rate at JPY210/GBP, that cost a reasonable (given the 60+km distance) £14.00, but now with the exchange rate at a record high of JPY120/GBP, the journey costs a punishing £24.50. Meanwhile, if you get thirsty, you will find a can of soda from a vending machine dear at around 130 yen. A year ago, that translated as 62 pence, which was in line with London prices. Now, that same can of soda sets you back by £1.08.
If you are a South Korean traveller, Japan will now cost you 43% more than it did a year ago, due to the won’s weakness. So why go now?