Japan, Korea tourism stocks rise on prospect of Chinese visitors
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An increase in visitors would help Japanese sectors such as retail, transportation and cosmetics.
PHOTO: REUTERS
TOKYO – Optimism that China will reopen the door for group tours to Japan and South Korea sparked a flurry of buying on Thursday in retail, cosmetics and travel stocks in Tokyo and Seoul.
Shares in Japan ranging from cosmetics maker Shiseido to department store operator Takashimaya climbed after the Nikkei said China would allow group tours to the country from Thursday.
South Korean travel-related stocks including Hana Tour Service jumped after Maeil Business Newspaper said China may announce an end to its ban on group tours as early as this week.
The hopes for an increase in visitors come even as tensions between Beijing and its neighbors simmer. China warned Japan on Wednesday against “being led astray again” after a former prime minister said the country and its allies must show their “resolve to fight” to deter any possible invasion of the island.
Japan’s current leader Fumio Kishida and South Korean President Yoon Suk-yeol are preparing for a summit with US President Joe Biden at Camp David next week, at which China is expected to be high on the agenda.
For the time being, investors are focused on how a rebound in tourism from China would help sectors that have suffered from a plunge in visitors since the start of the global Covid-19 pandemic.
Travellers from China to Japan totalled 208,500 in June, which was about 24 per cent of the level four years ago, according to data from the Japan National Tourism Organisation.
“Investors will likely enjoy this rally for a while,” said Ms Yu Jung-Hyun, an analyst at Daishin Securities in Seoul. Many companies had been hurt by disappointment over China’s economic slowdown and the fact that not many Chinese people were travelling overseas, she said.
If the reports are accurate, an increase in visitors would help Japanese sectors such as retail, transportation and cosmetics, JPMorgan Securities Japan strategists wrote in a note.
An increase in Chinese visitors would add to positive momentum that has built up as earnings in the sectors come out better than expected amid a stronger economy, they wrote.
“On average, 10 per cent upside potential remains between current stock prices and our price targets for inbound demand-related names,” the strategists wrote. BLOOMBERG