"LV stores are full of Chinese!" Under the depreciation of the yen, overseas tourists poured into "sweeping"

"The LV stores in Japan are all Chinese, and counting all kinds of discounts, a 20,000 bag can be cheaper by three or four thousand yuan. Ula (pseudonym), who recently traveled to Kyoto and other places in Japan, observed that under the depreciation of the yen, many luxury goods are nearly 10%-50% cheaper to buy in Japan than in China.

Hisoka (not his real name), who works for a large multinational conglomerate in Yokohama, Japan, has noticed that the number of foreign tourists coming to Japan has increased significantly, but many people around him have given up on their plans to travel abroad during the holidays.

What impact has the historical depreciation of the yen had on Japan? Recently, this reporter talked to Chinese businessmen, Chinese, tourists, and other groups in Japan to talk about the impact of the depreciation of the yen on them from different angles.

The price of more than 1,000 kinds of food has risen, and the cost of electricity has also risen

"The Meiji milk I drink most often used to be 280 yen (100 yen is about 4.68 yuan at the current exchange rate) for 1,000 ml, but now it is 300 yen for 900 ml, and tofu used to be 30 yen for 70 yen. Hisoka told reporters that before this round of inflation, Japan had not raised prices for decades, so although the increase was not large compared with Europe and the United States, it still had a big impact on Japanese people who were not used to inflation.

Chinese businessmen in Japan are also aware of the increase in the cost of living. "A kilogram of pork used to be 750 yen, but now it's more than 960 yen. Jin Xiaogang, president of the Shaanxi Chamber of Commerce in Japan, said that the rise in prices in Japan has been going on for a long time, probably starting in 2022.

Xue Pingyuan, president of the Japanese Federation of Overseas Chinese Women, told reporters that in addition to food and housing, her family's water and electricity bills have also risen. The average monthly electricity bill used to be 20,000 yen, but now it is an average of 30,000 or 40,000 yuan, and the highest price has risen to 60,000 yen (about 2,809 yuan).

Pan Ruowei, president of the Beijing General Chamber of Commerce in Japan, told reporters that data released by the Imperial Data Bank of Japan showed that in 2024, the trend of rising food prices continues, and in April 2024, major food producers plan to increase the prices of 1,765 goods.

In Pan's view, the depreciation of the yen is not the only factor affecting Japanese prices. Other factors, such as supply and demand, economic policy and the international trade environment, can also have an impact on prices. Therefore, even if the yen depreciates, the magnitude of the price increase may be constrained by other factors.

Wage increases can't keep up with rising prices

Prices are rising, but wages are not keeping up, making Hisoka feel like he is in a state of disguised salary cuts. Sisoka's company has a plan to raise salaries, but for grassroots employees, the range is only about 2%-3%.

"Although some companies are making a lot of money because of the depreciation of the yen, they are not willing to give their employees too much salary raise, preferring to pay dividends to shareholders. This is also the trauma caused by Japan's bubble economy before, and most Japanese companies still tend to save their profits after making money. Small and medium-sized enterprises do not raise salaries much, and the life of people with lower incomes will be harder. Hisoka said.

According to recent data released by Japan's Ministry of Health, Labor and Welfare, Japan's real wage income fell year-on-year for 23 consecutive months as of February.

The Japan Federation of Trade Unions (Rengo), Japan's largest trade union organization, said March 22 that Japanese companies had agreed to a 5.25 percent wage increase this year, the largest increase under comparable data since 2013.

"Although the Japanese government advocates wage increases, the yen has depreciated and prices have risen, and the effect of wage increases is not obvious. Xue Pingyuan said that at present, the wage increases are all huge enterprises such as automobile factories and pharmaceutical factories, and small and medium-sized enterprises have not raised wages. This also leads to a very small proportion of the overall wage earners in the overall wage earners, and the salary increase is not obvious.

"The Japanese government advocates that companies raise wages for workers, but some companies have no income and are under great pressure to raise wages. Jin Xiaogang said that the depreciation of the yen has promoted Japan's commodity exports to a certain extent, bringing huge profits to some export-oriented enterprises, but due to the rise in raw material prices, small enterprises like them cannot enjoy the dividends brought by the exchange rate.

Jin Xiaogang runs a software development company and restaurant brand in Japan. Jin Xiaogang said that the recent depreciation of the yen has a greater impact on the restaurant brand, on the one hand, the price of goods has risen, and the price of the set meal in the store has also risen, the original set meal of 800 yen is now sold for 1,000 yen; on the other hand, the labor cost is also rising, because of the depreciation of the yen, the relative decline in wages, it is more difficult to recruit people, and the store is also reducing the number of personnel, from 4 people to 3 people.

The software development company he runs mainly takes orders from large Japanese companies and provides development talents, but now that the Japanese software development industry is sluggish, the development space for enterprises is narrower. "We are now looking for a way to go back to China to raise funds and develop AI and unmanned stores. Jin Xiaogang said.

Kahei Madoka also runs a software development company in Japan. "Now I don't dare to send the development fee to China, I used to pay 20,000 yuan, but I only had to pay about 300,000 yen, but now 400,000 yen is not enough. Xue Pingyuan said.

Pan Ruowei said that in the outsourcing industry he is engaged in, the original contract price from Japan has not changed, but due to exchange rate fluctuations, it is equivalent to a decrease of about 30%. Although there will be some minor adjustments on the part of the Japanese customers, the overall impact is still quite large. Part of their company's business is software outsourcing, which has a certain impact on the company's costs and profits.

"Because I need to convert yen into renminbi to pay for expenses such as salaries for employees in China. It is expected that the yen will maintain some stability and rationality. Pan Ruowei said.

Tokyo, Japan Photo courtesy of the interviewee

There are Chinese people who buy houses with cash

Pan Ruowei pointed out that the depreciation of the yen could be a double-edged sword for foreign workers in Japan. On the one hand, the yen they earn in Japan may decrease when they remit back to their home country, and on the other hand, they may find that their purchasing power has increased for those who use their home country savings to spend in Japan.

Jiang Peng (pseudonym), who works in Osaka, has a lot of renminbi in his hands, and he is planning to take advantage of the sharp depreciation of the yen to exchange his renminbi for yen and buy a house in the suburbs of Osaka for investment.

The depreciation of the yen has also attracted a large number of international investors to the Japanese property market. Jiang Peng observed that Japan's housing prices have risen sharply in the past two years, with Tokyo rising by 30% and Osaka by 15%. "A house close to the subway is equivalent to about 2.6 million yuan, and the rent-to-sale ratio can reach 8%, but after deducting property tax, management fees and maintenance fees, it may only be about 5%. ”

Jiang Peng's intermediary also mentioned to him that many foreign investors favor Japanese homestay investment, and opening a homestay can apply for the operator's Japanese high-talent visa, and after three years, you can apply for permanent residence in Japan.

A recent research report by Soochow Securities pointed out that real estate prices in Japan's three major metropolitan areas have already entered an upward channel. The average home price in the Tokyo metropolitan area has increased by 75.9% over the past 10 years, with the cumulative increase doubling to an annualized increase of 7.2% in the metropolitan area, and the annualized growth rate of 4.1% and 4.0% in Saitama and Chiba prefectures in the non-core areas, both outperforming Japan's CPI.

Xue Pingyuan pointed out that the current housing prices in Japan have risen a lot, and they have returned to the peak of the bubble in the 90s. People around me who originally wanted to buy a house also began to hesitate.

"Nowadays, there are many overseas people who come to Japan to buy houses, but Japanese people can't afford to buy houses, and housing prices are very high in some places. Xue Pingyuan revealed that houses in some high-end residential areas in Tokyo that used to cost 100 million yen are now sold for about 250 million yen.

Pan Ruowei also noticed that some Chinese came to buy houses with cash, and many targeted the buildings in the Tokyo Olympic Village. After the Olympic Village was converted into a residential building, it has become a popular choice for investors and home buyers due to its strategic location and complete supporting facilities. As a result, some successful bidders may make a higher profit when they change hands and sell.

Tourists carry 2 28-inch suitcases to sweep the goods

"The depreciation of the yen is not all negative for the Japanese economy, and the depreciation of the yen can improve Japan's competitiveness, such as tourism and exports. Xue Pingyuan said.

Xue Pingyuan told reporters that at present, the Japanese government is exempting visas in various ways to reduce the difficulty of foreign visits to Japan. For example, for China's visa to Japan, the previous requirements for a deposit certificate of more than 200,000 yuan or an annual income of more than 200,000 yuan are now being withdrawn one by one, and now as long as you have a residence permit or household registration in China's first-tier cities, you can travel to Japan.

"Sports brand stores such as Nike and Adidas have significantly more tourists in Southeast Asia, while many stores in large supermarkets like Don Quixote have begun to broadcast in Japanese, English, Chinese, Korean, Thai and Vietnamese six Chinese. Hisoka said.

On social media, many Chinese netizens also shared their strategies for going to Japan to sweep goods.

Miao Miao, who just traveled to Japan in March this year, was addicted to "sweeping goods". "I felt that it was cheap to buy anything, and the more I bought, the more I felt that I was earning, so I brought two 28-inch suitcases with me, thinking that it was about the same, and then I bought two suitcases in Japan. ”

Ula, who recently traveled to Kyoto and other places in Japan, also observed that the local LV stores are all Chinese, and counting various discounts, a 20,000 bag can be cheaper for three or four thousand yuan. According to the official website of Japan's LV, the price of the carryall small is 379,500 yen, or about 17,767 yuan, and the price on the official website of China is 20,600 yuan in the same period.

Ula bought a mikimoto necklace at the Isetan mall in Kyoto, which is about 7,500 yuan, which is 3,000 yuan cheaper than in China. When I went for a tax refund near the closing time of the mall, there were about 30 Chinese in front of me.

College student Zhinan (pseudonym) recently went to Japan with his friends to play, and helped his friends buy the popular Chiikawa, and bought a small doll of more than 120 yuan in China at the original price in Japan for only 60 yuan. Zhinan said that many Chiikawa Chinese enthusiasts see Chiikawa directly packed in Japanese stores, especially limited models that need to be lucky.

Pan Ruowei said that the recovery of Japan's tourism industry has also made the profits of upstream and downstream enterprises red. For example, Takashimaya, a high-end department store in Japan, saw its highest operating profit in 33 years, mainly due to good sales of visitors to Japan.

Jin Xiaogang said that some people believe that the current depreciation of the yen has played a certain role in promoting Japan's economic development, and Japan is an export-oriented country. However, because Japan is relatively scarce in raw materials and relies on imports, a long-term depreciation of the yen will not be good for the economy, and corporate profit margins will be compressed.

According to Jin Xiaogang's understanding, the Japanese authorities still have a positive view on the depreciation of the yen, and the Bank of Japan (BoJ, that is, the central bank of Japan) has also raised interest rates.

"The Bank of Japan has always said that it wants to control the depreciation of the yen, but they have not been able to do so in real time and in practice. The Japanese government and banks seem to be still watching, as if they are waiting for something. Xue Pingyuan said.

Pan Ruowei said that there are differences in monetary policy between the government and the Bank of Japan on the depreciation of the yen. The government has taken steps to combat high prices and provide subsidies, while the Bank of Japan has continued to implement an ultra-loose monetary policy to overcome deflation. This policy divergence has affected the value of the yen.

"Regarding the duration of the yen's depreciation, market expectations suggest that the yen may continue to depreciate in the near term due to monetary policy differences between Japan and other major economies, especially the United States. Pan Ruowei said.

Since April 10, the yen exchange rate in the New York foreign exchange market has fallen sharply, once depreciating to 154.33 yen per dollar. The yen's exchange rate against the renminbi has also recently hit a new low in recent years. As of 10 a.m. on the 20th, 100 yen can be exchanged for 4.7 yuan. (Source: Sino-Singapore Jingwei)