Weakened Yen Fuels Japanese Jewelry Sales to Record High

Japanese consumers are driving record jewelry sales in the country's department stores. The yen's weakness is prompting people to invest in gold and precious metals as a safe haven from inflation, leading to a surge in demand for luxury jewelry.

The Japan Department Stores Association reported that sales of gems, precious metals, and artwork rose 19% in the first half of this year to ¥330 billion ($2 billion), the highest figure since records began in 2008. The Mitsukoshi department store saw jewelry and watches lead domestic sales, according to a company spokesperson.

Satoshi Maehara, president of Tokyo-based jeweler Happiness and D Co., said that people are increasingly turning to gold as an asset class, with demand for gold and precious metals becoming a major tailwind for the company's business. Rising interest in holding gold has led the company to shift its focus towards jewelry.

Japanese consumers are favoring branded jewelry over handbags due to higher living costs making them more selective about discretionary purchases, according to Bloomberg Intelligence analyst Catherine Lim. Luxury giants such as Cartier-owner Richemont and Gucci-owner Kering SA are benefiting from strong domestic demand for jewelry in Japan.