As Japan gears up for Olympic euphoria later this summer, some fret that the country could experience a sense of deja vu, recalling the significant economic downturn that followed the hosting of the 1964 Tokyo Games.
However, it is unlikely that Japan will face such a slump this time around. Rather than fearing an Olympic hangover, Japan should carefully observe other risks, economists say, such as trade conflicts, the U.S. presidential election and fallout from October's consumption tax hike.
"If the economy were to slow down after the Olympics, we would have seen the economy booming more prior to it," said Takayuki Miyajima, senior economist at Mizuho Research Institute, adding that Japan's economic growth rates in recent years do not indicate such a scenario.