Foreign Visitor Spending in Japan:

https://mainichi.jp/english/articles/20200315/p2g/00m/0na/021000c

Article:

TOKYO (Kyodo) -- The outbreak of the new coronavirus is expected to cut spending by foreign travelers to Japan by 981.3 billion yen ($9 billion), a private research firm said in a new report, revising upward from its earlier estimate of a contraction of 624.4 billion yen.

Resona Research Institute amended its forecast as it now expects the virus impact on inbound spending from February to be prolonged by one month through June. Its rapid spread, now across about 120 countries, has led to curbs on travel and the Japanese government to impose tighter border controls.

The institute estimated for the period between February and June, sales at department stores and drugstores, popular especially among Chinese visitors for duty-free products, will decrease by 397.6 billion yen, and that revenues at accommodation facilities will shrink by 259.6 billion yen.

Comments and Ideas:

Japan for the past five years or more has depended on tourism as a way to keep the economy going. And why not. When you have country of one million on your door step with an ever increasing middle class that is able and willing to spend big, why not develop the tourism market with friendly visa programs. 

The virus situation is definitely going to have a negative affect on the economy and all of those business involved in tourism.

Article:

Eateries and transportation sectors will also be hit by falls of 197.7 billion yen and 90.5 billion yen, respectively, it said in its March 11 report.

Japan restricted entry of visitors from China, the epicenter of the viral outbreak, and South Korea, which has seen a surge in infections, earlier this month, dealing a further blow to sectors that depend heavily on spending by the Asian neighbors.

"We made the latest assumption based on the premise that the global spread of the (new coronavirus) will be contained by around May but it is totally unpredictable," said Hideyuki Araki, an analyst at Resona Research.

The falls in inbound spending will come on top of a decrease in domestic consumption as people shun crowds and opt to stay indoors.

Comments and Ideas:

Both tourism spending and domestic spending will be a double hit for the economy. Both the BOJ and the fiscal side of the government need to work together to try and minimize the challenges that are hitting the economy. 

The positive of the situation is that there might be some new and innovative industries and businesses that might develop in this situation. Also companies might become more creative in how they do business such as restaurants using external delivery services to customers or phone in or use an app to order take out food and or for food delivery. Supermarkets might do the same and employ external delivery services to deliver food to those who might use an app and or order on the Web. Of course the problem is those who don't have a smartphone and or are not so good at online shopping.

Article:

Prime Minister Shinzo Abe has requested that big sports and cultural events in Japan be canceled or postponed, leading to a spate of cancellations and postponements of mass gatherings and travel across the nation.

"When deteriorated profitability at companies is added, the possibility of the country entering a recession will rise steeply," Araki said, warning also of increases in bankruptcies among small and medium-sized companies.

In the Kansai region including Osaka and Kyoto in western Japan, Resona Research said that consumption will decrease by 304.2 billion yen, amended from the 190.5 billion it forecasted in the Feb. 13 report.

Comments and Ideas:

There is no doubt the Japanese economy is headed for some kind of recession. But if all things were equal and or all things considered, in a normal recession, which this is not, not all industries or business are challenged. There are some industries and businesses that are not challenged while some are. But in this situation, most likely, there are still some industries that might be somewhat OK. Time will tell.

Have a nice day and be safe out there!

© 2020, Tom Metts, all rights reserved