Surging Yen Will Clobber Japan’s Rugby World Cup Visitors
Rugby World Cup Fans on Japan Odyssey Face Mauling as Yen Surges
(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 bookies favorites New Zealand have seen the kiwi drop 4.2% against its Japanese counterpart over the past three months. Those from second and third favorites England and Wales, according to odds from Paddypower.com, have seen the pound slide 6.8%.
To make matters worse, the currency losses are expected to continue. The kiwi is seen falling 2.4% against the yen in the third quarter, and the Australian dollar 1.6%, 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.
Very Expensive
Tim Kelleher, Auckland-based head of institutional FX sales at Commonwealth Bank of Australia, 55, 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 spending by overseas fans to be nearly 110 billion yen ($1 billion).
Flight, accommodation and match ticket packages start from between 6,000 to 10,000 pounds ($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 semi-final and finals package. The packages don’t 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.”
Sales Tax
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 -- Japan’s sales tax is expected to increase to 10% from 8% on Oct. 1, just when the tournament is really getting going.
Still, for O’Brien, the rugby union community are 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.”
--With assistance from Michael G. Wilson and Gareth Allan.
To contact the reporters on this story: Chikako Mogi in Tokyo at cmogi@bloomberg.net;Hiroko Komiya in Tokyo at hkomiya1@bloomberg.net
To contact the editors responsible for this story: Tan Hwee Ann at hatan@bloomberg.net, Cormac Mullen
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