Foreign visitors have been driving Japan’s economy. A stronger yen could reverse that trend

Foreign tourists have significantly boosted Japan’s economy due to a weaker yen, with travel spending contributing half of the country’s GDP growth rate in recent years. However, as the yen strengthens, analysts predict a potential decline in tourist spending, which could impact Japan’s economic growth and shift the focus from shopping to experiences like dining and entertainment. Despite record-high visitor arrivals and spending in 2024, rising domestic inflation and interest rates may lead to a reversal of the conditions that have made Japan a popular travel destination.

Full Article