Mika Ueda, a 27-year-old office worker in Tokyo, and her friends had planned on spending the holidays in Japan. After the yen hit a 14-year high against the dollar last week, they set their sights on Guam or Hawaii.
“I’m looking forward to doing a lot of shopping overseas,” said Ueda, holding a clutch of resort brochures after leaving a travel agent in Tokyo’s Shinjuku district Monday. “We decided to travel abroad when the yen strengthened, after first thinking about just going somewhere in Japan.”
The stronger yen, which cuts the cost of imported goods, is one of the bright spots for Japanese retailers as job losses and wage cuts chill consumer spending. Seven & I Holdings Co. and travel agency H.I.S. Co. are among companies with “endaka,” or soaring yen, promotions, aiming to halt the nation’s 14 straight months of slumping retail sales.
“They’re doing everything they can do to attract customers in a very tough market,” said Ichiro Takamatsu, chief executive officer at hedge-fund advisory Alphex Investments Co. “Lower prices may give some short-term relief.”
The yen has gained 11 percent in the past six months, reaching 84.83 per dollar on Friday, the highest since July 1995.
Seven & I said Monday it is cutting prices on imported fresh fruit, meat and beverages at its 166 Ito-Yokado supermarkets because of the stronger yen.
Prices of about 20 products are being cut by as much as 50 percent for three days starting Tuesday. Del Monte canned tomatoes have been reduced 41 percent to ¥88 and a 750-ml bottle of Perrier sparkling mineral water is 34 percent less at ¥198.
Supermarket operator Aeon Co. has had more than 100 imported daily items discounted by 20 percent at its 400 Jusco and Saty stores since October.
Japan, with a food self-sufficiency rate of about 40 percent, imports the highest proportion of food of any industrialized nation and thus shoppers get a break when the yen appreciates.
The discounting isn’t confined to groceries. Tiffany & Co. cut jewelry prices in Japan by an average of 5 percent from Nov. 20, citing the stronger yen.
Style Proposer, a Nagoya-based furniture store, offered a “high-yen sale” between Nov. 24 and Monday, cutting prices of some sofas and couches by as much as 64 percent. The price of its three-piece Chinese-made Hoffmann Kubus black leather couch was cut 49 percent to ¥64,000.
Shinanoya Inc., a Tokyo-based liquor importer that operates 12 outlets, is considering a promotion that would cut prices of wine and whiskey from the U.S. by as much as 30 percent, said Makoto Kikuchi, head of sales and marketing.
Average monthly wages slid for a 17th straight month in October, down 1.7 percent from a year earlier to ¥268,036, the labor ministry said Monday. The jobless rate reached a postwar high of 5.7 percent in July.
H.I.S., the nation’s biggest travel agency, ran a two-page advertisement in a newspaper Monday that included the line: “It’s a good time to travel when the yen is strong.”