TOKYO: Japan’s economy is missing out on the key benefactors a sharply weaker yen would normally attract: foreign tourists.

       Prime Minister Fumio Kishida recently indicated that a relaxation of border measures would allow back the first leisure visitors to Japan in more than two years.

       Still, a return to pre-pandemic tourist numbers of almost 32 million seems a long way off, even with the yen at a two-decade low.

       That’s depriving Japan of a tourism windfall worth 4.8 trillion yen (US$37bil or RM161.33bil) in direct spending in 2019, with a much larger impact as that cash filtered through the hospitality sector into the country’s regional economies.

       While Japan is hardly alone in suffering from the pandemic’s hammering of the global tourism industry, the optics surrounding the cratering yen would look quite different if high-spending foreign visitors were returning.

       Hidefumi Murota is among the tens of thousands of restaurant owners feeling the economic pain of the yen without the compensating increase in tourist traffic.

       “The weak yen pushes up our costs,” said Murota, who runs three Japanese style pub restaurants specialising in fresh fish dishes in Hakodate, Hokkaido.

       “At the same time, we don’t have any foreign travellers, and they tend to spend much more than Japanese. I hope they’ll be allowed back soon because they’re huge for our region.”

       With the economy’s recovery still lagging its Group of Seven (G7) counterparts, senior ruling party figure Hiroshige Seko told Bloomberg on Tuesday that entry caps should be scrapped, with business people and tourists allowed back.

       “To make the weak yen a positive for the economy, it’s important to increase the number of tourists,” Seko said. “In that sense too, it’s important to abolish the restrictions on tourists as soon as possible.”

       Kishida’s comments that he was looking to make entry levels equivalent to other G-7 members is an indication that Japan’s restrictions have been more stringent than most other major economies.

       The prime minister is considering reopening the border for foreign tourists on group tours as early as June in a measured step, according to local media. Analysts don’t expect a bold opening especially before elections this summer.

       “It will probably take a year or more to normalise border restrictions,” said Masato Koike, an economist at Dai-Ichi Life Research Institute, who follows the economic impact of tourism. “We don’t have a strong tailwind from a weak yen without those inbound travellers.” — Bloomberg