Japan has the third largest economy in the world. So why does it still have a disproportionate share of the global art market?
During The Phillips London Evening Sale just a few weeks ago, bidders located in Asia continued to vigorously compete for works by ultra-contemporary artists. But rather than the usual suspects of Hong Kong and mainland China, which led the market post-lockdown, a country that had long slipped off the radar of the global art market has made a quiet reappearance.
Online buyers from Japan fought a few bidding wars with those from the rest of the world during the sale, ultimately winning at least two coveted pieces: Michaela Yearwood-Dan’s Coping mechanisms (2021), which sold for £239,400 ($270,884), almost eight times the high end of the pre-sale estimate, and Evan at the Reading Festival (1993) by Elizabeth Peyton, which grossed £567,000 ($641,569).
Almost six years after the Japanese billionaire entrepreneur Yusaku Maezawa revealed to be the acquirer of Jean-Michel Basquiat’s $57.3 million Untitled (1982) painting at a Christie’s New York sale in May 2016 and several other multi-million dollar works around the same time, more and more Japanese collectors were buying overseas. Japan, once one of the biggest buyers of prized Western art until the bursting of its economic bubble in the early 1990s, may find its way back after its lost decades.
The country’s local market also seems to be growing, as evidenced by the success of the just-completed launch of Tokyo Art Weekthe prospect of a new fair next year in Tokyo Gendaiand the emergence of a young generation of collectors.
“We are seeing a growth in the number of collectors, especially between the ages of 30 and 50, in the contemporary art market,” Kyoko Hattori, regional director for Phillips in Japan, told Artnet News. “Art collecting has become a trend, which has accelerated in times of Covid. The market seems bullish as we have a growing group of collectors.
Contrary to Seoul in South Korea, which has been making a lot of noise in the global market lately, or Singapore, which is openly taking advantage of the uncertainties obscuring the pandemic restrictions of regional rival Hong Kong, Japan’s push into the global art market has been far more subtle.
Representatives of the big three auction houses – Phillips, Sotheby’s and Christie’s – said they noticed an increase in the number of Japan-based bidders and buyers at their sales. At Phillips, the number of bidders and buyers with an address in Japan at its auctions, both live and online, increased by 33% between 2019 and 2021; bidding and buying activity also increased by 60% (buying activity, however, only increased by 5%). More than half of customers with addresses in Japan are 50 and under, a Phillips spokesperson said.
The number of Japanese bidders at Sotheby’s global sales also increased by more than a third between 2017 and 2021, the auction house noted. Christie’s saw a 14% increase in Japanese purchases at its global auctions from 2020 to 2021.
At the same time, Japan’s domestic market has grown over the past decade. Data from the Artnet Price Database shows the total annual auction value at domestic auction houses in Japan more than doubled to $218.6 million from $92.9 million in 2012. in 2021. As of November 2, total sales in 2022 had already reached $197 million. Leading the race in 2021 was Mainichi Auction, which fetched $72 million, followed by $41 million from SBI Art Auction Co., Ltd, and $33.9 million by New Art East-West Auctions .
Takuya Asakura, executive director and general manager of New Art East-West Auctions, observed that over the past two years, the age range of the auction house’s most active customers has increased from 50 to 70. years to 30 to 40 years. The main sales categories have also shifted from traditional Japanese art to contemporary art, he noted.
Many of these young collectors are successful entrepreneurs, said gallerist Tomio Koyama, who is also the representative director of the Contemporary Art Dealers Association Nippon (CADAN). “Many of them seem to have sympathy for artists who take [on] new challenges in their practice,” just like how they started their own business, Koyama noted.
Market growth figures may be encouraging, but as the world’s third-largest economy with a population of 125.7 million, Japan’s share of the global art market remains disproportionately small, at just 3.7% of the world market, according to estimates by the Japan Art Industry Market Research Survey 2021an annual survey published by the Japanese Government Agency for Cultural Affairs and the Art Tokyo Association.
Contemporary art is still a niche market in Japan, noted collector Kazunari Shirai, an entrepreneur who has a collection of more than 300 works of art, including a mix of Japanese artists such as Yayoi Kusama and international artists of Louise Bourgeois, Wolfgang Tilmans, William Kentridge, Cornelia Parker and Lucio Fontana.
“Japan has a very diverse culture, and it contains different kinds of markets, items that you use in tea ceremonies to the fine arts. So from the perspective of a global art market, the Japanese art market seems small,” said Shirai, who co-founded Art Week Tokyo. “There hasn’t been a lot of information about contemporary art that has been made available until recently. It is still in development. »
“The amount of money spent on art in Japan is probably a bit higher in reality [than the figures in the survey]“, weighed Koyama, adding that “only a fraction of collectors buy on the high end of the market”.
Collectors or buyers?
While Japan’s domestic auction market is expanding, some industry insiders have observed that the current trend in art buying is “odd.”
“It’s mostly street art and illustrations,” notes Tomoko Ashikawa, director of the Waiting Room gallery. “Not all of these works are popular internationally, but they are said to be cool locally. Many art buyers are unfamiliar with the international scene or academic references in art.
Koyama said many buy art by following their intuition and tend to buy artists they want to support. “That way, their shopping habits aren’t too far removed from fashion and trends,” he noted.
The dealers’ comments were echoed in the results of the Japan Art Industry Market Survey, in which respondents cite that the decoration of their living spaces, impulse purchases and the use of the work “as a practical object” are among the most common reasons for buying art, rather than the usual reasons for buying to invest or to collect.
One of the hottest names on the market right now is Kyne, a 1988-born Fukuoka-based artist whose drawings of women’s faces have become a trending icon among younger audiences. Its top 10 prices in the Artnet Price Database were obtained in 2021 and 2022, and more than half of them were obtained through sales made by SBI Auction Co., Ltd.
New Art East-West Auctions has also sold some of Kyne’s works, and Asakura has observed that buyers who are looking for hip and fashionable works like Kyne’s often approach the auction house for a specific work that they are looking for. ‘they want, rather than having a long-term goal to build a collection.
“They might just be a one-time purchase. There are no guidelines on what young buyers like to buy, but they tend to follow artists who have sold their work at their gallery shows,” Asakura said. There could be a chance these works could be cheaper at auction than galleries, he noted, but more importantly, it’s a way for buyers to show they have good eyes.
Changes for the future
But as the young crowd matured, Asakura hoped their tastes would change, which would see them prefer contemporary art featured in local galleries. He also expects Japanese artists, especially younger ones, to continue to attract collectors from outside the country such as Korea, mainland China, Hong Kong and the West, especially as long as the yen remains weak. New Art East-West Auctions plans to resume auctions in Hong Kong in May 2023. The auction house has been selling in Hong Kong since 2008.
However, for the Japanese market to continue to grow, some structural issues need to be overcome. The tax system is a major flaw as it currently offers few concessions to art purchases, and art as an inheritance is no exception. “There is a lack of infrastructure for people to pass on or preserve works of art for future generations,” Koyama said.
Japan, however, is working to relax its tax rules for art, a move that is seen as a strategy to reposition the country, particularly its capital Tokyo, as a stronger artistic hub in Asia. Galleries, auctions and art fairs have been allowed to bring overseas art to designated customs areas without having to pay import duties since last February. The tax is only required if the purchased works are shipped to a Japanese address after they are sold. If the artwork is to be shipped outside of Japan, no tax is required. New Art East-West Auctions held a contemporary and modern art sale in September at Warehouse Terrada, where bonded goods imported from overseas could be sold.
At the same time, many have expressed hope that through events such as Art Week Tokyo and next year’s Tokyo Gendai, local gallery owners, artists and collectors will enjoy greater international exposure.
“The main goal is to establish a connection between international and local markets,” Shirai said of Art Week Tokyo, which will develop an educational platform for art lovers and collectors, and Shirai, as the owner of Jitsugyo no Nihon Sha publishing company. , sees the importance of sharing information and knowledge. “We want to bridge the information gap by connecting the internal market to the rest of the world,” he said.
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