Source: Bloomberg – Michelin Chefs Toast Abe as Yen Turns $5,000 Wine Cheap
Tokyo’s Michelin-starred chefs are raising a glass to Prime Minister Shinzo Abe’s effort to revive the economy as a weak yen and stronger corporate profits put gourmet dinners back on the menu for tourists and local bosses.
Taiwanese guests at Quintessence think nothing nowadays when dropping 500,000 yen ($5,086) on a bottle of wine. “They say it’s cheap,” chef Shuzo Kishida said at his three-star French eatery in the Japanese capital, home to more of the top-ranked restaurants than any other city in the world.
Since Abe took office in December, the yen has dropped by more than 10 percent against most major currencies and economic growth has accelerated. Shares of Hiramatsu Inc. (2764), an operator of one-star restaurants, have doubled this year as sales pick up across the industry with rising demand for truffle soup, caviar and abalone steamed with sake.
The prime minister’s vow to resuscitate Japan’s moribund economy with a combination of monetary easing, fiscal stimulus and regulatory reform — a policy package dubbed Abenomics — has been the main driver behind a 10 percent sales increase at Ginza Kojyu, said chef Tooru Okuda.
“Abenomics was a burst of sunshine I never imagined would happen,” said Okuda, whose restaurant’s specialties include broiled eel in a sauce from the fish’s bones, sweet rice wine and coarse sugar. “It’s been great — foreign customers increased because of the falling yen.”
Spending by tourists and companies has helped offset business lost last year after an industry group put limits on wining and dining of doctors by drugmakers, he said.
Corporate credit-card transactions at Tokyo’s high-end restaurants jumped 25 percent in the seven months ended July from a year earlier, according to Japanese card company JCB Co. Even as the finance industry cut jobs, combined profits at the local units of 10 global banks rose fivefold for the year ended March 31, regulatory filings show.
“We’ve seen more customers from the financial industry since the start of the year,” said Masahiro Yoshitake, master chef at Sushi Yoshitake, another three-star restaurant in Tokyo’s pricey Ginza neighborhood. “They often have foreign guests visiting.” He estimated the increase in banking and finance customers at between 10 percent and 20 percent.
Average spending per customer at restaurants serving dinner rose 1 percent in August, the fourth monthly gain in a row, data from the Japan Food Service Association show.
On a recent Monday in Ginza, British tourists Alan Ashton and his 24-year-old son, Jamie, said they were looking for good sushi on their Japanese holiday. The exchange rate “gets better day by day,” said Ashton. “People say Japan is expensive, but I haven’t found it expensive.”
The yen has been the worst performer against the British pound over the past year among the major currencies tracked by Bloomberg, losing about 20 percent. The currency also dropped by a similar amount against the U.S. and Taiwan dollars, and by more than 22 percent against the euro and Chinese yuan.
Overseas visitors to Japan rose 23 percent to a record 4.95 million in the first half of 2013, the Japan National Tourism Organization said in July.
Kishida, the chef who has seen surging demand from tourists for pricey wines, says Taiwanese, Thai and Hong Kong visitors are spending more partly because of growth and rising levels of wealth in their home economies. The fortunes of ultra high net worth individuals increased 5 percent to $210 billion in Taiwan and 16 percent to $110 billion in Thailand in 2013, according to the Wealth-X and UBS World Ultra Wealth Report.
“They are amazing,” he said. “The Taiwanese are drinking a lot more wine than Japanese people.”
Meringue Ice Cream
Dinner at his restaurant costs 18,900 yen for about 13 dishes, according to its website, with the menu changing daily apart from two regular items: an appetizer made of goat’s milk and a meringue ice-cream dessert.
Hiramatsu said profit rose 66 percent for the nine months ended June due to improving consumer spending fueled by Abenomics.
Average customer spending is rising gradually, said Kazunori Nakatani, executive chef at the group’s one-star Maison Paul Bocuse, which lists dishes such as truffle soup and sea bass with saffron sauce on its website.