Hong Kong’s battered retail sector could benefit from a rise in the strength of the Japanese yen and the South Korean won, according to a report from Credit Suisse.
But the less shoppers going to both countries, is not expected to make up for the loss in revenue from mainland shoppers coming to the city, the study adds.
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Hong Kong retail sales in June slid 8.9 per cent from a year earlier to HK$33.7 billion ($4.34 billion) in value terms, slower than a revised 8.3 per cent slump in May. In volume terms, June sales dropped 9.6 per cent, government data showed last week.
Mainland visitors to Hong Kong, who account for nearly three-quarters of the city’s total visitor arrivals, fell by 3.8 per cent to 3.21 million in June, although that was a narrowing from a 15.1 per cent decline in the first quarter, according to the latest figures.
A sharp depreciation in the Japanese yen against the Chinese yuan since mid-2014 led to an influx of Chinese shoppers to the neighbouring country, where popular luxury goods were far cheaper than in Hong Kong. Last year, the number of Chinese tourists to Japan reached 4.99 million, almost double the previous year.
Travelling and shopping to South Korea, meanwhile, is also getting more expensive with the Korean won rising 5.5 per cent against the US dollar this year.