Business

Surging yen likely to clobber Rugby World Cup visitors to Japan

by Chikako Mogi and Hiroko Komiya

Bloomberg

For Rugby World Cup fans budgeting for the trip of a lifetime to Japan this fall, the recent surge in the yen could have come at a better time. And the currency gods seem to be inflicting the most pain on followers of teams with the highest chance of winning.

Supporters from New Zealand (whose national squad is seen by bookies as the team to beat) have seen the kiwi drop 4 percent against the yen over the past three months.

Fans from second and third favorites England and Wales, according to odds from Paddypower.com, have seen the pound slide almost 7 percent.

To make matters worse, the currency losses are expected to continue. The New Zealand dollar is seen falling 2.4 percent against the yen in the third quarter, and the Australian dollar 1.6 percent, according to forecasts compiled by Bloomberg. The beleaguered pound is expected to be little changed.

“I will obviously just have to take into consideration that the trip’s going to be a bit more expensive than first planned,” said John O’Brien, 39, director at Kobe Insurance Services, a Sydney-based insurance broker. “It’s going to be a little bit more spending money than what was required initially.”

O’Brien, who will be visiting Japan with his wife for the first time, plans to spend one week each in Tokyo and Osaka, and watch a match between Australia and Wales.

Demand for haven assets amid global economic uncertainty has helped bolster the yen in recent months, while expectations for further monetary stimulus has weighed on currencies from New Zealand to Australia to the European Union. Sterling has had the extra complication of Brexit added to the mix.

Tim Kelleher, 55, the Auckland-based head of institutional FX sales at Commonwealth Bank of Australia and an avid rugby fan, said he would have considered going to Japan if the exchange rate was better.

“The kiwi-yen is pretty well at its lows of the past five years, and it makes it very expensive for New Zealanders to travel and follow the team,” Kelleher said. “We are also far less likely to have relatives in Japan to stay with than, say, if it was in the U.K.”

According to organizer Rugby World Cup Japan 2019, more than 400,000 international fans are expected to come to Japan between Sept. 20 and Nov. 2, where 48 matches will be held across 12 cities with 20 national teams playing.

It estimates that spending by overseas fans will be nearly ¥110 billion ($1 billion).

Flight, accommodations and match ticket packages start from £6,000 to £10,000 ($7,500 to $12,500) for fans from the U.K., according to travel agents. Those from New Zealand can expect to pay from NZ$10,000 ($6,700), before flights, for a semifinal and finals package. The packages do not include meals, snacks — or beer.

“Once people look at the prices, it’s looking relatively expensive considering it’s only a 10-hour flight away,” said Kelleher. “If the kiwi was stronger, it would have helped to come.”

On top of currency weakness, the rugby fans will also have to deal with another bump-up in costs which is already vexing the locals — the consumption tax is expected to increase to 10 percent from 8 percent on Oct. 1, just when the tournament is really getting going.

Still, for O’Brien, the rugby union community is committed to traveling, and the financial side shouldn’t be too much of an issue for them. And it hasn’t deterred him.

“I am really looking forward to coming,” he said. “I love the food, and it will be just amazing to see some of the culture and also experience Tokyo.”

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