Posted on: Tuesday, September 23, 2003

Many in Hawai'i cheered by yen's rise

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 • Calls for flexible currency rates put damper on stocks

By Kelly Yamanouchi
Advertiser Staff Writer

As the yen reached its highest level in almost three years at 111 yen to the dollar yesterday, Hawai'i tourism experts and retailers who cater to Japanese visitors anticipated a boost in business.

"This is just great. It's very good news," said Sharon Weiner, the DFS Group vice president who oversees duty-free stores that cater to Japanese tourists. "It should provide a note of optimism."

A stronger yen means that the yen goes further in buying hotel rooms or air fares or retail attractions, all segments," Weiner said.

At Tiffany & Co. at Ala Moana Center, a major draw for Japanese tourists, director John Geppert said that it's always good for business when the yen increases in strength.

In the past, the positive effect of a rise in the yen has been immediate, said James Mak, professor of economics at the University of Hawai'i. Japanese tourists usually are well aware of the exchange rate.

"It's going to increase the number of Japanese who would be willing to come to Hawai'i," Mak said. "Even amongst those Japanese tourists who are already here, all of a sudden the yen they brought here is going to buy more stuff, so likely that's going to translate into more Japanese visitor spending."

The main downside for Hawai'i is that a stronger yen eventually could make goods imported from Japan more expensive for U.S. residents.

The rise in the yen came after finance ministers from the Group of Seven major industrial nations met in Dubai, United Arab Emirates, last weekend and said they would welcome more flexibility and less government intervention in exchange rates. The statement could curb the Japanese government's efforts to keep the yen weak, which it had done as a way to stimulate an export-led economic recovery.

Many Hawai'i businesses took notice.

"We watch it closely, that's for sure," said Roger Finnie, executive vice president and chief operating officer at retailer Louis Vuitton. "Any time there are factors that make Hawai'i more competitive in the tourist environment, it has to be positive."

But few expect it to spell the end of economic problems for Japan.

"We cannot expect the Japanese economy to grow robustly, so we should take whatever benefits we can of the yen against the dollar," Mak noted. "Japanese tourism has been in a downward slide since 1997. ... I don't see how we're going to have a return to the days of 1997."

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.