Japanese consumers are driving luxury jewelry sales to record levels as the weaker yen and higher living costs encourage shoppers to place more of their money into products they may view as stores of value. Sales of gems, precious metals and artwork at Japan's department stores increased 19% year over year to 330 billion, or about $2 billion, in the first half of 2026, marking the highest total for the period since records began in 2008. This growth significantly outpaced the 3.2% increase in overall department-store sales, while duty-free sales also rose 3.2%, suggesting domestic shoppers have been the main force behind the surge. The trend comes as the yen trades near 164 per dollar, its weakest level since the 1980s, while Japan's core consumer prices excluding fresh food rose 1.6% in June.
Happiness and D, a Tokyo-based jewelry maker that has traditionally sold imported luxury brands and high-end watches, has shifted more of its business toward jewelry to capture increasing demand for gold and precious metals. President Satoshi Maehara said it is becoming more common for consumers to hold 5% to 10% of their assets in gold rather than cash as the yen loses value. Bloomberg Intelligence analyst Catherine Lim also observed that Japanese consumers are increasingly choosing branded jewelry over handbags as higher living costs make them more selective about discretionary purchases. Investors may view this behavior as supportive for luxury groups with stronger jewelry portfolios, including LVMH Moet Hennessy Louis Vuitton (LVMHF), the global luxury company that owns jewelry brand Chaumet, as some shoppers appear willing to purchase sooner amid repeated price increases.
Richemont (CFRUY), the Swiss luxury group that owns Cartier, reported a 20% year-over-year increase in sales during its latest quarter, almost twice the growth analysts had expected, with Japan delivering the strongest regional performance led by jewelry. Kering (PPRUY), the French luxury group that owns Gucci, also reported a 57% increase in Japanese jewelry sales during the first quarter, even as its fashion and leather-goods business in the country declined 14%. Isetan Mitsukoshi Holdings, Japan's largest department-store operator, said jewelry and watches continued to lead domestic sales alongside handbags, cosmetics and food, reinforcing the view that consumers may be cutting spending in some areas while continuing to spend on higher-quality, longer-lasting goods. The strength of domestic jewelry demand could help support Japan's broader luxury market as the sector faces slower inbound tourism and a sharp decline in Chinese visitors amid political tensions with Beijing.