The Japanese yen has settled a bit after its recent sharp increase against the U.S. dollar. But what does that mean for local businesses that count on visitors from Japan?
It’s relatively unusual for the U.S. and Japanese governments to coordinate intervention in global currency markets, even more unusual to talk about it. But these have been unusual times.
Last month, the yen fell to its lowest value against the dollar in 40 years. If that trend continued, some feared Japan might be forced to sell some dollar assets.
Because Japan is the largest buyer of U.S. government debt, selling Treasury securities could have pushed long-term U.S. interest rates even higher.
But enough macroeconomics. What about the currency’s potential impact on Hawaiʻi?
Visitors from Japan to the islands peaked in 1997 — with 2.2 million — or nearly a third of all visitors to Hawaiʻi.
At that time, a dollar was worth about 121 yen. More recently, the pandemic wiped out 90% of Japanese visitors to Hawaiʻi. Their return has been painfully slow for the local hospitality industry.
Currency rates have been one factor — although not for the wealthiest travelers.
If history is a guide, for overall visitor numbers to recover, it’s going to take more than what in the bigger picture are relatively modest moves in exchange rates.
