Strong yen begins to threaten Japan's tourism boom of recent years

Tokyo

TRADITIONALLY a manufacturing giant that relied upon exports for its wealth, Japan has been viewed more recently as becoming increasingly dependent on tourism to fuel its growth. But as data published this week has revealed, the real dependency of the world's third largest economy is on the exchange rate of the yen.

Japanese media reported on Wednesday that spending by foreign visitors decreased in the third quarter of this year, compared with a year earlier, for the first time in over four and a half years, owing to a decline in "bakugai" or "explosive shopping" binges by Chinese and other foreign tourists.

In fact, the number of tourists and the amount of foreign currency they spent in Japan were little changed. Translated into terms of the yen (which has spiked sharpl…