The yen’s sharp drop is transforming Japan’s reputation as a prohibitively expensive place to visit, turbocharging the country’s tourism industry long identified as a growth engine for the maturing economy.
With a dollar now fetching close to ¥100—up from less than ¥80 in November—foreign visitors have surged, while Japanese curb overseas travel and do more sightseeing at home.
The number of foreign visitors to Japan in March, the latest figure available, jumped 26.3% from a year earlier to 857,000, the highest for a March since 1964, when the Japan National Tourism Organization started taking statistics.
The weaker currency has helped Japan’s tourism sector overcome a number of setbacks in the past two years. The 2011 nuclear accident scared away visitors worried about radiation. Heightened territorial tensions with Beijing have since last year led to a sharp drop in tourists from China, once the fastest-growing source of visitors to Japan. While Chinese travelers continue to shun Japan, visitors from the rest of Asia, Europe, and Russia have more than made up for the gap.
In Ginza, Tokyo’s high-end shopping district, a group of 34 tourists from Sweden was riding a large tour bus after shopping on a recent afternoon.
“Japan is selected as the most desired holiday place by the Swedish,” said tour guide Magnus Carlsson. “It’s a hot destination, which used to be too expensive. But it’s now cheaper,” added Mr. Carlsson, who has guided about 100 Swedish tourists over the past two months, not only in Tokyo but also to Nagano and to Kanazawa of Ishikawa prefecture in northern Japan.
Hiroshi Saito, a tourism promotion official in Ishikawa, said his prefecture saw a 44.5% increase in the number of foreign visitors to its famous Kenrokuen garden for the first three months of this year compared with the same period a year earlier.
Seeing a sharp increase in the number of travelers from South Korea, the prefecture invited 22 travel agencies from the neighboring country last month to show them around tourist spots as well as golf courses.
“We’d like to take advantage of the weak yen to lure more tourists,” from South Korea, Mr. Saito said. “It’s a market that has room to grow.” He also thinks Ishikawa can now “take back” Korean tourists who were traveling by ferry in recent years to Japan’s southern island of Kyushu, when the strong yen led them to try and cut travel costs.
As for China, “as it is a big market we need to watch, but for now we’re taking a wait-and-see attitude,” Mr. Saito said.
In Tokyo’s Akihabara electronics district, a duty-free shop catering in particular to Chinese tourists remained empty on a recent afternoon. “The weak yen won’t lure them back,” a Chinese clerk said. “What matters is the political issue.”
But Akihabara was packed with visitors from other countries.
Daniel Wijono from Indonesia was waiting with his two boys for his wife and his mother to finish shopping for cosmetics outside an Akihabara drugstore, the last day of his nine-day trip to Japan. The 37-year-old employee of a manufacturing firm was holding three bags containing electronics gadgets, game character figures, and Uniqlo sweaters.
“It’s quite good. Things are cheaper more than 10% this time,” he said, comparing prices to his prior visit early last year. “One yen equals 115 [Indonesian] rupiah last time. It’s now 103,” said Mr. Wijono. “But I’m afraid that I ended up spending more than I had expected,” he grinned.
Meanwhile, the number of Japanese who plan to take an overseas trip during the so-called Golden Week holiday that started Monday is expected to be down 5% from last year, while the number of people traveling within Japan will likely set a record, according to data released last month by Japan’s leading travel agency JTB.