Tokyo Expects Olympics to Have 3-T.-Yen Economic Effects

Tokyo, Sept. 8 (Jiji Press)--The 2020 Summer Olympics in Tokyo will involve a total of 2.96 trillion yen of directly related spending between 2013 and 2020, the Tokyo metropolitan government has estimated. With private-sector economists anticipating additional effects of a large-scale upgrade to the aging metropolitan expressways and a long-term boost to tourism in Japan, there are hopes the hosting of the Olympic Games will drive economic growth. Daiwa Securities Co. has branded the selection of Tokyo as the Olympic host as "the most powerful element of Abenomics," referring to Prime Minister Shinzo Abe's economic policy package aimed at overcoming deflation. The total of the metropolitan government's estimate includes 651 billion yen in the services sector, including restaurants and hotels, and 474.5 billion yen in the construction industry. "It won't be surprising if Japan's GDP (gross domestic product) growth is pushed up by some 3 percentage points (by the economic effects of the Olympics) in any of the years (through 2020)," Eiji Kinouchi, chief technical analyst at Daiwa Securities, said. If this were the case, Japan could see economic growth as high as the 6.2 pct logged in fiscal 1990 during the asset price bubble. In the April-June quarter this year, Japan's real GDP rose at an annual pace of 2.6 pct, according to preliminary government data. Economists expect Tokyo's hosting of the 2020 Olympics to have not just a direct impact but also broader effects on the Japanese economy. The renewal of Tokyo's aging expressways, which were developed when the Japanese capital last hosted the sports event in 1964, is expected to be promoted in the run-up to the 2020 Games. Construction and real estate firms are pinning hopes on urban redevelopment projects, as well as special demand for facilities for athletes and stadiums. The Tokyo Olympics may also be a catalyst for promoting Japanese culture, including anime, music, food and traditional craft work, overseas. The Abe administration plans to spend 50 billion yen on the promotion under its "Cool Japan" strategy. The Olympics and related events will be "sort of a trade fair of Japan" for visitors, including journalists, an official of a major securities firm. END