MUFG say eased restrictions on Chinese international travel are yen supportive

<p>I posted earlier on China removing pandemic-related restrictions on group tours to more countries, including the U.S., Japan, South Korea and Australia.</p><ul><li><a href="https://www.forexlive.com/news/flights-between-the-us-china-are-set-to-double-by-the-end-of-october-20230814/" target="_blank" rel="follow" data-article-link="true">Flights between the US China are set to double by the end of October</a></li></ul><p>MUFG has assessed one ramification of the easing of restrictions as being beneficial flows into yen. </p><p>Key Points:</p><ul><li>China's Easing of Travel Restrictions: China recently revealed that it would be lifting restrictions on group travel to 78 countries, effective immediately. This is expected to lead to a significant resurgence in Chinese tourism abroad. </li><li>Beneficiary Countries: Among the countries set to benefit from this decision are Japan, South Korea, Australia, Germany, the UK, and the US. These nations saw an immediate reaction in their tourism-linked stocks, especially airlines, which performed significantly well in markets that previously benefited from Chinese tourism. </li><li>Japan to Benefit Notably: China's tourists have always had a preference for Japan as a travel destination. Given the easing of restrictions, Japan is anticipated to see a significant boost in tourism inflow from China in the coming times. </li><li>Supportive Flow Data for Yen: The recent data indicates a shift that favors the JPY. While this alone isn't enough to predict a reversal in JPY's direction, it's a step in the right direction. </li><li>A Potential Turn in JPY Depreciation: If evidence emerges of a US slowdown and market expectations adjust regarding Federal Reserve policy, the yen's depreciation trend could reverse. In such a scenario, the balance of payments data would validate and bolster the JPY's strength.</li></ul><p align="left">
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This article was written by Eamonn Sheridan at www.forexlive.com.