How the Olympics Turned Into a Big Financial Mess for Japan

It could not have turned worse for the organizing country, which is now poised for serious financial losses.

After being postponed in 2020 due to the COVID-19 pandemic, the Tokyo Olympics are now ongoing, even though issues are still being reported. Sports fans are watching how athletes perform on screens rather than in stadiums, as travel restrictions and rising COVID cases in Japan are not acting as incentives.

It could not have turned worse for the organizing country, which is now poised for serious financial losses. Even in the past, the Olympics were not profitable to manage, but at least tourism was flourishing and people were spending more money.

With a pandemic still rattling the world, extra costs associated with testing, vaccination, quarantine, and distancing measures, need to be taken into account.

COVID-19 pandemic still has consequences

Speaking of Japan, the country’s latest daily count release shows close to 4,000 new cases for a few good days now. Rising cases are worrying and public authorities are already taking precautionary measures. On a global scale, a similar trend can be spotted.

Although vaccination has been progressing at an encouraging pace across developed nations, the Coronavirus manages to spread among the unvaccinated.

At the same time, new virus strains like the Delta, which is reported to be more contagious, make keeping the spread under control even more difficult.

Estimates point to a $20 billion economic loss

According to The Wall Street Journal, the 2021 Olympics could turn into a $20 billion loss for Japan. Stadiums and arenas that were built or renovated for the event will be left empty of fans, even though the costs are estimated at over $7 billion.

Olympics and COVID-19

Instead of incentivizing people to attend the events, the government is trying to keep the public away, aiming to prevent a major outbreak. Toyota Motor Corp, a global Olympics sponsor, has already announced it wouldn’t run any ads in Japan tied to the event, pointing to a grim mood inside the organizing country.

Are investors shifting towards other avenues?

The COVID-19 changed investor behavior completely. Tight restrictions and social distancing measures pushed both retail and institutional players towards the financial markets.

One of the industries that witnessed impressive growth, despite a recent setback, is crypto, leading to a rapid rise in the value of Bitcoin, Ether, and other altcoins.

With cryptocurrency trading platforms like Starcapital already offering competitive services, people can take advantage of the impressive volatility in the market using derivatives and attractive trading costs.

On Starcapital’s website, there are plenty of details provided, including the fact that all customers are entitled to guidance from a dedicated account manager.

Also, the Starcapital trading platform is designed to optimize trading speed and efficiency, enabling people to trade from anywhere in the world, directly from a browser, on a long list of cryptocurrency assets.

As the Olympics continues to unfold, financial markets are still one of the places generating returns for investors. When and how the bull run will end is currently tied to liquidity conditions and interest rates. Accommodative fiscal and monetary policies support higher asset valuations.

Got a news tip? Let Us Know