As the yen weakened against the dollar to its lowest point in 26 months yesterday, at least some retailers catering to Japanese tourists said they've seen spending drop.

"There's been a reduction in yen spending as well as how it translates to the dollar spending," said Sharon Weiner, DFS Hawai'i group vice president. "And we think that probably the reduction in yen spending is because they don't think they're getting as good a deal in the U.S. as they were before. So we're seeing all that."

The dollar traded as high as 118.34 yen yesterday, marking the first time since August 2003 that it surpassed the 118-yen mark. So far this year the dollar has risen nearly 16 percent against the yen.

Weiner also said the number of Japanese visitors last month and so far this month fell short of expectations, which she said is partly attributed to the weaker yen. Another likely factor is that Japan Airlines also suspended two of its eight daily flights from Japan to Hawai'i last month.

The number of passengers arriving here from Japan last month fell 3.6 percent compared with October last year.

Bank of Hawaii chief economist Paul Brewbaker said he doesn't expect the weakening of the yen to have much effect on visitor arrivals, noting that the Japanese economy is also stronger and that other issues also influence travel demand.

"But once they get here, their yen aren't going as far," Brewbaker said, adding that it would have more of an effect on retailers, restaurants and activities companies. "They have to live within a budget that has now shrunk, and they will be making choices accordingly. ... I would imagine you wouldn't notice it at the ABC store, but you might in some of the boutique retailers."

But "having said that, the Japanese visitor occupies a much smaller share of the tourism space than it used to. So the margins at which these changes are occurring are smaller and have a smaller impact for the whole economy than they would have 10 years ago or 15 years ago."

Yujiro Kuwabara, general manager in customer service for Japanese travel agency JTB in Hawai'i, said he hasn't noticed any changes linked to the weaker yen. But he said it could affect future travel because most wholesalers are now putting together tour packages for next year that estimate prices based on current exchange rates.

By the Beach, located in the Sheraton Moana Surfrider, also saw a drop in Japanese spending in the last several weeks compared to a year ago, said buyer and supervisor Jo Leonard. She agreed that the weaker yen is a factor, but also noted that the younger generation of Japanese tourists don't spend as much as before.

"We have a lot of repeat customers, like the older generation, but the younger generation, I guess they go somewhere else like Wal-Mart and K-Mart and Ross," she said. "For us it's supposed to be busy, like the last week of October, but actually it's not because of the way they're spending."

Leonard said last year Japanese tourists made up 65 percent of By the Beach's business, while now they make up 45 percent to 49 percent.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.