Japan's Weaker Yen Fuels Record Luxury Jewelry Sales

Japan's luxury jewelry market is booming, driven by domestic consumers who are treating high-end items as stores of value in uncertain economic times. Department store sales of gems, precious metals, and artwork increased by 19% year-over-year to 330 billion yen ($2 billion) in the first half of 2026, marking a record for the period since records began in 2008.

The trend is largely due to Japan's weak currency, which has fallen to its lowest level against the US dollar in decades. This, combined with higher living costs, has led consumers to prioritize spending on luxury items that are seen as long-term investments. According to Satoshi Maehara, president of Tokyo-based jewelry maker Happiness and D, it is becoming more common for Japanese consumers to hold 5% to 10% of their assets in gold rather than cash.

The growth in luxury jewelry sales has outpaced overall department-store sales, which rose by only 3.2%. Duty-free sales also increased by 3.2%, suggesting that domestic shoppers have been driving the surge in demand. Luxury groups with strong jewelry portfolios, such as LVMH Moet Hennessy Louis Vuitton (LVMHF) and Richemont (CFRUY), may benefit from this trend.

Richemont's latest quarterly sales figures show a 20% year-over-year increase, with Japan delivering the strongest regional performance. Kering (PPRUY), another luxury group, reported a 57% increase in Japanese jewelry sales during the first quarter, despite a decline in its fashion and leather-goods business.