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We had exhibited at the Japan Jewellery Fair 2016 for 3days, held in the Tokyo Big Sight from 01/09/2016 to 03/09/2016．
The aspect of our industry changed suddenly. Economy has been slowing down since the U.K. had decided to leave European Union (EU) by the result of referendum held on June 23. Appreciation of yen, due to the increased financial risk of entire Europe, became a big concern in particular. Japanese yen would be bought when a world risk increases. It is a consistent movement of the exchange since the issue of subprime loan, and means that Japanese yen is recognized as safer currency all over the world．
It is because Japan is the world’s largest net asset country in the 23 consecutive years, and loaning out the most money in the world. Therefore, the movement of the rewind of the domestic fund which had been loaned out and risk hedges from the foreign countries to Japan was strengthened. Then, rapid appreciation of Japanese yen has been boosted by speculative money. By an exchange effect, the strong yen affects adversely to corporate earnings and to decline the stock prices. Also, it becomes the factor of deflation and deteriorating economy downturn, and I think it is undesirable. As for this appreciation of Japanese yen, it was caused by the surge of the financial risks in the Euro zone, but the credit anxiety of Deutsche Bank might be another factor for the further appreciation of Japanese yen．
Deutsche Bank is into a vicious circle at the present. By having a lot of risk assets off the high leverage, Deutsche bank had fallen into financial aggravation from the capital deficiency. Then IMF warned that the degree to affect the systemic risk is the biggest among the world’s major banks. The systemic risk refers to the chain reaction failure. If Deutsche Bank becomes morbidity, negative influence spreads to the world, because Deutsche bank shares stocks and bonds between the banks of the other countries in the euro zone．
The strong yen that came under these influences has an influence on our industry． In particular, decline in the price of merchandise is to be seen remarkably．In addition to the worldwide economic downturn, it seems that price of these items are falling day by day． Furthermore to the falling of the trade market price by the strong yen, this decline in market price is also caused by the released goods on the market to recover the fund from distract sales, or business failures． Besides the price gradually falls almost every week, I recognized the case traded with lower price than actual market price by having the perception that suggest further price crush. Especially the declining of the market price of so-called high unit price diamond, good quality or big size diamond is intense．And the decline rate is the highest among the previous years．
Also, recycle business which had suddenly spread for these past several years seems to have a hard fight. These recycle shops buy precious metal which became unnecessary from the users, and make profit by circulating them at the secondary market, such as an auction. But now, the secondary market price had fallen below the recycle market price because of the current situation. When this happens, they have to offer at the much cheaper price to their clients in order to make profit. On the other hand, it makes them very difficult to buy．If the buying price is low, they lose their clients． And if the buying price is high, it becomes very difficult to make profit. It seems that they are in the negative loop．
Also, the sales amount at the recycle shops to the foreign tourist seems to be fallen. Buying trend had changed to drugs or variety goods from jewelry and luxury items. The current deflation and real economy is serious. I have begun to see business failures in our industry and to hear that situation might be much worse in the future．
I would like to say that this exhibition, which was held under such circumstances, represented heavily the current business confidence． There were fewer Chinese and other foreign buyers from the first day of the show, and the number of the Chinese buyers seemed to be declined about 1/3 compared to the previous year. Their buying motivation was drastically reduced; they just wanted to buy only special item or something which is really value for money. And this item was really difficult to find, then their buying amount seemed to be very small. Also, the Japanese buyers were few at the show, and looked inactive at all．
Real economy in the world is dull. And it is moving toward to the deflation spiral due to the decline of market price caused by the sales slump. I wonder and worried how this atmosphere effect on the future of our industry．
But I believe it is more important to think positive and to be flexible. If the market price goes down in the near future, we will try to collect much of the inexpensive items, and to suggest to my clients．This world is in chaos situation, but we would strive hard to get out of this difficult situation together with our clients．
Finally, we would like to give our sincere gratitude to our client who visited our booth, even in this kind of difficult situation．
