Yen Sinks Back to 160: Card Companies Expand Touchpoints Throughout Entire Japan Travel Process

Despite U.S.-Japan Intervention, Yen Weakness Persists

A Weaker Yen Makes Travel to Japan More Attractive

"Card Company Benefits Now Extend Beyond Fees to the Entire Travel Experience"

As the weak yen persists for an extended period, credit card companies are intensifying their competition to offer services targeting travelers to Japan. With a steady demand for trips to Japan, companies are expanding customer contact points throughout the entire travel experience, ranging from currency exchange services to local transportation and shopping payments, as well as providing discounts on accommodation and tourist attractions.

According to the financial sector on August 19th, the value of the yen recently plummeted, prompting authorities in the United States and Japan to intervene in the foreign exchange market, causing the yen-dollar exchange rate to drop to the 155 yen range. However, it soon rebounded and approached the 160 yen level. Despite the joint intervention by both countries, downward pressure on the yen continues.

The weak yen is a factor reducing travel costs for foreign visitors to Japan. A study by Mizuho Research & Technologies showed that when the yen drops 1% in value against major currencies from the G20 countries, the total number of inbound travelers to Japan increases by approximately 0.6%, and per capita spending rises by 0.2%. While it is difficult to attribute the demand from Korean travelers to Japan solely to the weak yen, there is analysis indicating that the currency’s decline is making travel to Japan more attractive in terms of price.

There is also a noticeable trend of travelers securing yen in advance before their trips. Last month, the amount of yen exchanged through Hana Money Travelogue reached 207.5 billion won, up 171% from the previous month. Hana Card commented, "Last month saw a noticeable increase in demand for yen exchange," and added, "This appears to be the result of more customers exchanging yen in advance to prepare for upcoming trips during periods of low exchange rates. We expect the demand for travel to Japan to continue increasing in the fall and winter."

Domestic credit card companies are broadening customer engagement to capture the already sizable demand for travel to Japan. Hyundai Card recently partnered with the travel platform NOL to add benefits to its existing ‘Japan Partnership Service’. Until August 31, customers receive a 7% discount on major accommodations in cities such as Tokyo and Osaka, and a 5% discount on tours and tickets nationwide in Japan.

Global card companies are also striving to improve payment convenience for Korean customers in Japan. Mastercard, for example, has introduced open-loop contactless payments on Tokyo Metro, expanding the range of usage to public transportation in major Japanese cities. Customers can pay fares simply by tapping the physical card they use in Korea at transit gates, eliminating the need to purchase or recharge separate transportation cards.

Furthermore, by enabling overseas contactless payments in the app cards of major domestic issuers such as KB Kookmin Card, Shinhan Card, Hana Card, and Woori Card, Korean travelers can make payments with their smartphones in Japan. Mastercard stated, "We have enhanced our payment solutions across Japan to allow Korean visitors, incentivized by the weak yen, to enjoy even greater convenience while traveling."

A representative from the card industry commented, "Previously, benefits were mostly focused on reducing currency exchange or foreign transaction fees, but now, financial services are being expanded to cover the entire travel process—from exchanging currency before departure, to making payments for transportation and shopping, and receiving discounts on accommodations and sightseeing. For card companies, it has become more important not to rely solely on exchange rate effects but to attract customers by improving payment convenience, offering discounts, and forming partnerships with other platforms."

This content was produced with the assistance of AI translation services.