The depreciation of the Japanese yen and the surge in tourists have boosted duty-free sales of Japanese department stores by 150.4% year-on-year to 397.8 billion yen in the first seven months of 2024, far exceeding the full year of 2023 and setting a new historical high. The surge in luxury goods sales is particularly significant, highlighting the high enthusiasm of international tourists for Japanese goods and luxury goods, further proving the positive role of yen depreciation in enhancing the purchasing power of foreign tourists.
In July 2024, the tax-free sales of Japanese department stores increased to 63.3 billion yen, doubling year-on-year and ranking third since October 2014. The number of tax-free shoppers increased by 77% to 571000, with significant contributions from Chinese and Korean tourists. In July, the total sales revenue of the department store industry increased by 5.5% to 501.1 billion yen, marking 29 consecutive months of growth and surpassing the same period in 2019 before the pandemic. The depreciation of the Japanese yen, as a catalyst for shopping, greatly enhances the purchasing power and consumption desire of foreign tourists in Japan.
The comprehensive recovery and strong growth of the Japanese retail market have shown vigorous development vitality in various products. Luxury goods sales increased for 34 consecutive months in July, with an annual growth rate of 17%; The clothing market has been steadily growing for 29 months, with an annual increase of 4.6%; Precious metal jewelry has increased for 42 consecutive months, with a significant year-on-year increase of 16.1%; Cosmetics sales have risen for 29 consecutive months, with an annual increase of 12.4%.
In the first seven months of 2024, the number of tourists visiting Japan increased by 61.7% to 21.07 million. In July, the number of Chinese tourists increased by 41.9% to 3.293 million, exceeding 200 for 14 consecutive months, leading the way. The number of European and American tourists also increased. With the gradual recovery of the global tourism industry and Japan as a popular tourist destination, it is expected that this duty-free sales boom will continue to maintain strong momentum in the coming period, bringing a more prosperous scene to the Japanese department store industry and even the entire retail market.
It is reported that the interest rate differential between the United States and Japan is large, and arbitrage is prevalent. In the first half of the year, the Japanese yen fell more than 11.4% against the US dollar. Although it rebounded after July, it still fell by over 2% for the whole year, with an exchange rate of about 145. The depreciation of the Japanese yen attracts international tourists, and it is expected that the fluctuation of the yen exchange rate will continue to affect the tourism market, promote consumption growth in Japan, and provide favorable conditions for export enterprises.
On this basis, Japan can improve the service quality of tourism related industries such as hotels, catering, and transportation to meet the needs of international tourists, improve tourist satisfaction, or cooperate with other national tourism bureaus, travel agencies, etc. to jointly promote Japanese tourism and attract more international tourists. At the same time, closely monitor the fluctuation of the Japanese yen exchange rate, adjust tourism policies and shopping discounts in a timely manner, and also pay attention to the consumption potential of the domestic market. Through preferential policies, promotional activities, and other means, enhance the purchasing power of domestic consumers.
