Asia Minute: Weaker yen may complicate Japanese spending in Hawaiʻi
Friday is the first day of Japan’s “Golden Week," a string of national holidays that’s traditionally a popular time for Japanese travelers to visit Hawaiʻi. While the tourism industry has high hopes for a boost in business, there’s one potentially troubling factor they can’t control.
There’s nothing like an international trip to focus the mind on exchange rates. And for visitors coming to Hawaiʻi from Japan, that’s not a comfortable exercise these days.
Thursday afternoon, the yen tumbled to more than 130 to the dollar. That’s the lowest rate against the U.S. currency in 20 years.
For Japanese tourists, it means their money doesn’t go as far as it used to when they’re spending dollars.
The yen has been weakening because Japan’s central bank is keeping interest rates relatively low. That tends to push investment flows to economies — and currencies — with rising interest rates, such as the United States.
But for your average visitor from Japan strolling the beaches and sidewalks of Waikīkī, there’s an even more relevant number: 20%. That’s the effective increase in prices that Japanese travelers face from a little more than two years ago — just because of exchange rates.
On the last day of January 2020, a dollar would buy you a little more than 108 yen — compared to about 130 today.
It’s not clear what impact that 20% price differential may have on Japanese travel to Hawaiʻi.
But for the local hospitality industry, it’s one more piece of the already complicated puzzle of international business.