In a country where unemployment is near record levels after a decade-long economic slump, people tend to think twice before opening up their wallets and going on a spending spree.
But that could change, at least for a while, when Japan and South Korea co-host the monthlong World Cup soccer championships starting May 31.
"The World Cup is just about the only bright light we see ahead that will spur consumer spending in Japan," said Shuji Shirota, an economist at securities house Dresdner Kleinwort Wasserstein.
Akiyoshi Takumori, economist at Sakura Investment Management, said that after France hosted the World Cup in 1998, the country's economy grew 3.3%--its highest rate of the 1990s.
Brokers' "to-buy" lists are getting longer as they add the sporting goods manufacturers, the media, breweries, consumer electronics manufacturers, security companies and even cosmetics firms.
HSBC Securities strategist Garry Evans studied the correlation between the World Cup and each host country's stock market and found that most bourses posted strong gains in the run-up to the competition.
"In France in 1998, for example, the CAC-40 [stock index] rose 39% in the first half of the year and outperformed global equity markets by 22%," Evans said in a report to clients issued in December.
And, apart from the more obvious stock buys, such as TV manufacturers and breweries, Evans also advises that investors put money into sectors such as cosmetics.
"[Soccer] souvenirs will obviously sell well, but so may cosmetics and perfume as men with a guilty conscience for having left wives and girlfriends at home buy them as gifts," he said.
Two private think tanks, Dentsu Institute for Human Studies and the Institute for Social Engineering, have estimated that the World Cup will bring in $13 billion even in the worst-case scenario--if the Japan team fails to make it through the first stage of competition.
With Japan's total output at about $3.8 trillion per year, that additional spending would increase growth in the country's gross domestic product, the broadest gauge of the economy's health, by more than 0.3 percentage point.
The latest data show Japan's recession deepened in the final quarter of 2001, with the country's GDP shrinking 1.2% as business investment logged its biggest quarterly decrease on record.
Hitoshi Sakai, chief executive at the Institute for Social Engineering, said he plans to revise his forecasts up because they don't factor in the effect of cultural exchanges between Japan and South Korea, which are also expected to stimulate spending.
But, despite the optimism, other economists remain skeptical.
"I do reckon the World Cup will have some positive impact, but people should not get their hopes too high," said Kazuhiko Ogata, senior economist at HSBC Securities. "When Japan hosted the Nagano Olympic Games in 1998, it didn't have a significant impact on the economy. And the environment is strikingly similar now, as Japan was in the midst of a financial crisis back then."
Spending by foreign visitors, which will be counted as part of Japan's GDP, could boost consumption. The Transport Ministry estimates 365,000 people will visit Japan during the World Cup.
But Ogata noted that, according to Finance Ministry data, when Japan hosted the Nagano Games in February 1998, spending by foreign visitors that month actually fell 4.3% compared with that month the previous year.
And even if the World Cup does stimulate the moribund economy, analysts question whether the effect will last long.
"Personal consumption in the April-June quarter will be good, but what's important is how it performs in the following quarter when the economy is seen hitting a cyclical bottom," said Shirota of Dresdner Kleinwort Wasserstein.
Sakura Investment's Takumori warned that local businesses should do their share in trying to encourage the Japanese people and foreign visitors to spend more.
"The economy could slip back into negative territory if people just sit back idly," he said, adding that tourist resorts, for example, should think of ways to become more welcoming to foreigners.
On top of that, there's the question of how Japan--rated 66-to-1 to win the World Cup by British bookmaker Ladbrokes--will perform in the tournament.
Japanese electronics makers and retailers expected sales of audiovisual goods, such as flat-screen televisions, to pick up in the country because of the Olympics in Salt Lake City. But those hopes were dashed, partly because of Japan's poor performance. Its athletes won only two medals, compared with 10 at the Nagano Games.
"Of course, if Japan becomes the World Cup champion, that would definitely brighten sentiment, but that's too much to ask," Shirota said.
And Evans at HSBC Securities warns that the stock market could fall quite sharply after the World Cup, as previous patterns have suggested.
But Japan, desperately seeking a catalyst to jump-start the economy, is looking beyond what the World Cup may do to help get it back on its feet.
Yokohama, host of the championship match and Japan's second-biggest city, thinks the contest will raise its relatively low profile abroad.
"We hope that those who stay in one of Yokohama's hotels and visit our tourist spots will return to their homelands and be our messengers," said Koichi Hayashi, manager of the city's planning bureau.