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I wish you all the best in the new year．Thank you very much for your special hospitality last year．I would like to ask for your continued patronage this year. We will continue to maintain and improve the quality of our products and fulfill our responsibility to supply products to meet the needs of our customers.
We have been exhibiting at the 35th International Jewelry Exhibition held at Tokyo Big Sight East Exhibition Center from January 17th to 20th, 2024．
Last year was a year in which inflation hit people’s lives around the world, while the voluntary restraint of economic activities to prevent the COVID-19 infraction ended. During the strict lockdowns in the COVID-19 pandemic, economic activity was not able to continue and demand declined, leading countries to engage in quantitative easing as a bailout measure. However, the moment the lockdown was lifted, resources, which had been shaken by a slowdown in demand, turned around and became in short supply, causing resource prices to rise sharply.
In 2024, the slowdown in overseas economies, including the U.S. and China, combined with the current trend of yen depreciation, is expected to slow down exports by Japanese companies. Geopolitical risks such as Russia’s invasion of Ukraine and the conflict between Israel and the Islamic organization Hamas may cause energy and grain prices to rise further, which will likely affect the global economy. This year is also an election year with a series of major elections in various countries and regions around the world, which is likely to have a major impact on the international community.
Although there are some headwinds this year, such as the bursting of the Chinese bubble and the recession in the U.S. and Europe, many are saying that a tailwind is beginning to blow for Japan. While Western countries are scrambling to counter inflation by adopting tight monetary policies, Japan continues to pursue quantitative easing measures, and the weak yen has led to a sharp rise in the earnings of Japanese companies. As evidence of this, the Nikkei Stock Average has risen in value, mainly in the manufacturing sector, reaching its highest level since the burst of the bubble economy.
In addition to the weak yen, the decoupling of the U.S. and China is causing major manufacturers to return to their domestic operations. Due to China’s restrictions on semiconductor exports, Japanese companies are moving their semiconductor factories back to their home countries in earnest, and a resurgence of domestically produced semiconductors is beginning to take place. The return of many Japanese companies to the domestic market will have a positive impact on surrounding industries such as their subcontractors. For the Japanese economy, domestic production is expected to boost Japan’s GDP growth rate.
Quantum computers will lead the way in future technological innovation. Currently under development in Japan, optical semiconductor technology, which offers extremely fast computing speeds and greatly reduced power consumption, is said to bring about changes comparable to those of an industrial revolution. Optical semiconductors are essential for 6G, the next generation communication standard. Japan is leading in this field, and the domestically produced semiconductor project may lead to a quantum computer bubble.
Furthermore, this year Japan will have a new banknote design. It is said that Japan regularly switches to new banknotes because it is an anti-counterfeiting measure and an economic stimulus measure. In the process of switching from the old to the new currency, cash stored at home is released into the market. The market for home-stored cash is likely to be stimulated by an increase in the amount of money in the market and the volume of currency. We hope that this, combined with the current strong inbound demand, will be a factor in cheering up the Japanese economy.
It was under these circumstances that the IJT jewelry show was held in Japan in January, which is considered to be a predictor of the future of our industry every year. Before the show, expectations were lower than usual due to the poor economy in China. However, once the show opened, it was crowded with many visitors and the atmosphere was more lively than last year. The jewelry show seemed to have been a great success, as the show was busy until the last day of the exhibition.
However, the number of buyers from China was quite less, and sales of high-priced products were poor. Even Pearl, which had been in a bubble-like state for the past several years, was experiencing poor sales due to the economic slowdown in China. This time, sales of merchandise for the Chinese market were poor overall, and this situation is likely to continue this year.
This jewelry show saw many overseas buyers from Southeast Asia, Europe, and the United States, and the venue was abuzz with excitement. The popularity of Japanese companies seems to be increasing due to the quality of Japanese products and the low price due to the weak yen, which may be changing the face of overseas buyers in the future. The market for many products is likely to change in the future as well.
Although Japanese people are not willing to pay high prices due to the weak yen, many of them are seriously looking for new products due to the shortage of commodities. In Japan, the Noto Peninsula region of Ishikawa Prefecture has been hit by a huge earthquake since the beginning of the year, and there has also been a lot of damage, including an airplane crash. Many industries, including our own, are expected to be affected.
We are grateful to the many people who came to our booth this time under such difficult circumstances. We thank you from the bottom of our hearts. This year is going to be another year of upheaval and change. We will be adapting to the changes and hope to see you all again. See you at the next jewelry show.
We would also like to express our deepest sympathies to the victims of the Noto Peninsula earthquake in Ishikawa Prefecture.
