Japanese yen collapse forces nation to reopen for travelers

The Japanese government is walking back years of harsh travel restrictions as the yen collapses in value due to a stagnant economy and weak trade.

Japan will allow all travelers with at least three COVID-19 vaccine injections or a negative test result to enter the country without the need for a visa.

Japan until recently has all but completely rejected foreigners seeking entry or re-entry into the country.

The dramatic reversal was announced as the Japanese government struggles to keep the yen from further collapse.

Fuji

The yen fell to a 24-year low point last week, its value plummeting to a mere ¥144 to the U.S. dollar.

Deputy Chief Cabinet Secretary Seiji Kihara told Fuji TV on Sunday that Japan is considering a total rollback of all major restrictions.

“Amid the weakening yen, [incoming tourism] will have the greatest effect,” Kihara said, according to the Japan Times. “And there are the autumn leaves and powder snow. There are many foreign visitors who want to come visit Japan.”

Japanese officials were exceptionally nervous throughout the global pandemic as experts panicked that coronavirus could pose an existential threat to the aging population.

However, the world’s third-largest economy was already stagnating before the pandemic hit.

The government estimated real economic growth of 3.2% in fiscal year 2022-2023, up from a prior estimate of 2.2%.

But with debt still accounting for 34.3% of the budget, it will remain difficult to achieve a primary budget surplus by fiscal year 2025-2026, which the government aims to do.

The primary budget deficit — excluding new bond sales and debt servicing — is seen at 13 trillion yen in fiscal year 2022-2023, improving from 20 trillion yen seen this year but still far from the government’s target.

[Source: Reuters ; FOX Business/ Images: Flikr]

 

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