Times are tough for Hong Kong retailers. And even worse for those with links to Japan.
Shares of CEC International Holdings Ltd. which runs the 759 chain of stores, have tumbled 32 percent this year, compared with a 0.5 percent retreat in the MSCI Hong Kong Index. International Housewares Retail Co. and Aeon Stores Hong Kong Co. — both of which sell Japanese products — have dropped at least 6 percent.
The yen is fast extending its advance versus the Hong Kong dollar after recording the biggest quarterly surge since 2009, driving up the cost of goods brought in from Japan and exacerbating the Chinese territory's already gloomy retail outlook. There are few signs of a let-up, with Eisuke Sakakibara, the former finance ministry official dubbed Mr. Yen for his ability to influence the exchange rate in the 1990s, predicting a continued rally against the greenback.