"July Japan Mega-Quake Rumor... Impact on Japanese Financial Market?"

"July Japan Catastrophe" Rumor
Number of Hong Kong Visitors to Japan Down 11.2% Year-on-Year
Japanese Financial Sector Sees It as a Mere Incident... No Market Impact

Yonhap News

On June 30, Daishin Securities released a report titled "Will the July Japan Catastrophe Rumor Affect the Japanese Financial Market?" The report analyzed that while the Japanese financial market is not reflecting the catastrophe rumors, investor sentiment in airline and travel stocks may be affected.

In Japan, rumors of a "July Japan Catastrophe"?a disaster surpassing the 2011 Great East Japan Earthquake?are spreading. The catalyst was manga artist Tatsuki Ryo, who previously gained attention for allegedly predicting the Great East Japan Earthquake. In his manga "The Future I Saw," he mentioned July 5, which fueled the speculation.

From June 21 to 6 p.m. on June 28, a total of 525 earthquakes with a seismic intensity above 1 were observed in the Tokara Islands south of Kagoshima Prefecture, Kyushu, Japan. On June 28 alone, there were over 40 earthquakes, and in some areas, tremors with an intensity of 4?enough to surprise most people?were detected. The Tokara Islands are close to the Ryukyu Trench, where the Philippine Plate subducts beneath the Eurasian Plate, resulting in frequent tectonic activity, numerous volcanic islands, and underwater volcanoes.

Due to the "July Japan Catastrophe" rumor, the number of visitors from Greater China to Japan has declined. In May, the number of visitors from Hong Kong to Japan decreased by 11.2% compared to the same month last year. Until last year, Japan's weak yen provided a significant advantage as a cost-effective overseas travel destination, but this year, the yen has strengthened, erasing that advantage. In addition, the rise of Asian countries such as China?which has introduced visa waiver measures?has increased the likelihood that demand for travel to Japan will enter a period of adjustment.

Moon Namjung, strategist at Daishin Securities, stated, "The Japanese financial market is dismissing the July Japan Catastrophe rumor as a mere incident and is not reflecting it. However, it is likely to impact investor sentiment in airline and travel stocks." He further analyzed, "Key factors to watch in the current financial market include the outcome of the US-Japan tariff negotiations, the possibility of a Bank of Japan (BOJ) rate hike in October, and whether the ruling party will maintain a majority in the July House of Councillors election."