As a result, the fall in the won-to-yen exchange rate is having some influence on the consumption patterns in Korea.
According to Korea Tourism Organization and Japan National Tourist Organization, the number of Koreans who visited Japan in 2006 grew to 2.11 million, a double the amount recorded in 2001. On the contrary, the number of Japanese who visited Korea in 2006 stayed at about the same level as 2001 at 2.33 million. As the five-day working system is being firmly rooted in Korea presently, it is all the more likely to see a further rise in the number of Koreans visiting Japan along with the forecast decline in the exchange rate for some time to come.
In terms of credit card payments, the amount of payments made in Japan by Koreans in the last three months of 2006 stood at US$70.47 million, a 29 percent increase from the same period in the previous year. On the other hand, the amount of payments Japanese made in Korea during the same period stood at US$97.94 million, a 16 percent increase from a year ago.
In addition, the proxy delivery business of buying products in Japan for such products as golf items, fishing tools, and automobile tuning equipment through the online shopping malls such as e-Bay and local auctions is rapidly rising. In the case of the Japan's auction site Bidbuy for proxy buying, for example, the earnings are continuously rising together with the continuous downward trend of the exchange rate. The online auctioneer's sales rose by 34 percent from 4.8 million auction sales in the first half of 2006 to 5.7 million sales during the same period this year.
Good examples for the Japanese products gaining a growing share in the Korean market are foodstuffs. In late 2006 for instance, a big department store expanded the sales booth of Japanese foodstuffs by as much as four times to occupy half of the store's total selling space for the selling of 1,500 items including soy sauce, various sauces, and buckwheat noodles. The reason for such a high share of Japanese foodstuffs in Korea can be found in the fact that Korean consumers are feeling no significant price gap between the products from Korea and Japan as the decline in the yen-to-dollar exchange rate during the past three years has resulted in a 10 percent drop in the price of Japanese foodstuffs.
In terms of trade balance in the service sector, Korea has maintained a trade surplus since 1998. But in 2005, the balance turned into deficits (US$730 million) for the first time since the statistics were made and in spite of the high popularity of Korean dramas in Japan. The trade deficit in the service sector is showing signs of spreading into service sectors that include travel and education due to the downward trend of won-to-yen exchange rate.
