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A short walk from the selfie stick-wielding crowds of Tokyo's Harajuku, the serene side streets of Omotesando are peppered with fashion-conscious tourists. Sporting Dior saddle bags and silk Hermès scarves, they're scavenging for the must-have memento of their trip: a secondhand designer handbag.

"There is huge demand here," says vintage dealer Kris Jiang, 29, who's on track to make $1.6 million this year from reselling luxury bags mostly sourced from Japan. "It's the modern-age tourist souvenir: Come to Japan, and buy a vintage bag."

As the weak yen lures record numbers of bargain-hungry tourists, the country's vintage industry is booming. Instagram and TikTok are awash with "Tokyo vintage haul" videos, featuring bags and clothing from foreign brands that Japanese consumers bought new during a luxury boom in the 1980s and '90s and kept in mint condition. Travel agents are launching tours of the best shops across major cities, and resellers such as Jiang are seeing their profits soar.

Japan's secondhand fashion market topped ¥1 trillion ($6.4 billion) for the first time last year, with sales of luxury vintage goods jumping 16% in 2024 alone, according to a study by the Reuse Economic Journal.

The influx of customers has transformed Omotesando's formerly sleepy secondhand stores into tourist hot spots, perhaps none more so than vintage reseller Valuence Holdings Inc. In July, the company shelled out an eye-popping $10.1 million at Sotheby's Paris to buy the original Hermès Birkin bag, created for the late actress Jane Birkin — an expensive marketing ploy only possible because of its surging revenue.

"Had it been five or even three years ago, there's no way we could have dreamed of making such a purchase," says Shinsuke Sakimoto, Valuence's chief executive officer. "The weak yen has undoubtedly been a boon for sales."

The 10-minute auction, which Sakimoto says ultimately pitted him against Jeff Bezos' wife, Lauren Sánchez Bezos, put Valuence on the global map. His winning bid marked the most ever paid for a handbag at auction, and the company featured in 400 news articles in the three weeks that followed — buzz that Sakimoto estimates would normally have cost about ¥700 million to generate. Sánchez Bezos didn't reply to a request for comment via the Bezos Earth Fund. Sakimoto expects the bag will cost Valuence around ¥10 million a year in storage and insurance.

Sakimoto, who took over the fashion portion of his father's secondhand goods business in 2011 after briefly dabbling in professional soccer, concedes he's not a Birkin fan himself. "I prefer quiet luxury over the flashy items," he says, fiddling with a Hermès Chaine d'Ancre bracelet on his right wrist, which retails for almost $2,000. But the deal sent ripples through Omotesando, where stores compete daily to impress tourists with the hottest, rarest designer pieces.

"The purchase of the original Birkin was the talk of the industry," says Shinoko Itakura, brand director of Amore Vintage. Its flagship store, with a basement devoted to a rainbow of vintage Chanel, is a few streets away from Valuence's headquarters. "The price was astonishing," she says.

Amore is no stranger to high-ticket items. Its customers include Kim Kardashian, rapper Kendrick Lamar and pop star Dua Lipa, whose autographs adorn the store's bubblegum-pink walls. When the Los Angeles Dodgers were in town this spring, the chain sold a rare Chanel baseball shirt to the wife of a player, though Itakura coyly deflected when asked to disclose which one.

Celebrity interest in Japanese vintage has skyrocketed since borders reopened after the pandemic, according to Itakura, as the country's reputation for well-preserved, hard-to-find pieces proliferated on social media. Amore sources all its inventory from domestic auctions and sells almost exclusively to foreign tourists.

"Japanese people generally take very good care of their possessions, and only use expensive items on special occasions," says Itakura, leaning forward to avoid crumpling the Chanel bomber jacket draped over the back of her chair. "Luxury pieces in good condition circulate in abundance in Japan. There's an almost never-ending supply that keeps the vintage industry running."

That deep pool of secondhand designer goods sets the country's market apart from global peers, according to Shinya Nagasawa, a professor at Waseda Business School in Tokyo, who specializes in design and brand innovation. It's a result of the heady days of Japan's bubble economy in the mid-1980s to early '90s — an era of cheap credit and rising asset prices that sparked an explosion in firsthand luxury purchases, especially among women.

With extra disposable income, many splashed out on rare, limited-edition items, Nagasawa says. "One in three, or maybe even one in two Japanese women owned something from Louis Vuitton" during that time, he estimates.

Most bubble-era bags have been stashed away in closets for the better part of 30 years, but with living costs now rising and '90s fashion trending again, "people are realizing they can fetch a pretty penny for the designer items they've taken good care of," Nagasawa says. That's causing a surge in selling, creating a healthy supply-demand cycle for the vintage market, he says.

Still, with demand inextricably linked to the weak yen, currency moves could derail the boom.

Valuence's Sakimoto says a strengthening in the yen — which could be on the horizon if the Bank of Japan raises rates in December — would "inevitably hit" its retail sales. It would also be a blow for Amore. Tourists from the US are the company's largest customer base, and fewer may travel if costs climb.

For now, President Donald Trump's tariffs remain a demand driver, says Itakura, as the levies increase costs for Americans buying vintage online. That's adding to the appeal of shopping in Japan, where tourists can pick up items tax-free at stores, though levies should still apply if they return home with more than $800 worth of goods in their luggage.Tariffs are one reason Jiang, based in New York, has begun making regular trips to Japan for on-the-ground sourcing. Her business, Rebelonging, ships vintage finds to the US, where she sells them at pop-ups and online with a 25% markup. Meeting suppliers in person gives her a chance to persuade them to shoulder some of the duty costs at the US border in return for a bulk purchase, she says.

Jiang documents her search for rare Japanese vintage on TikTok, where she's amassed almost 80,000 followers in two years. Chanel Classic bags are her best sellers and typically go for at least $3,000.

Japan's reputation for high-quality goods and strict counterfeit checks has earned its vintage industry a cult-like following in the global "fashion girl" community, Jiang says. Demand is so strong that, even if currency moves were to force her to hike prices, she sees no signs of her business slowing down. "I just see exponential growth," she says.

The original Birkin arrived in Tokyo earlier this month and is being displayed at Valuence's Omotesando store through Nov. 24. A recent visit found the bag under a spotlight in a blacked-out room on the third floor. Customer numbers at the shop have tripled to around 150 a day since the exhibition began, according to the company.

Sakimoto has no plans to sell the Birkin — which cost more than Valuence's total operating profit last fiscal year — but hopes its presence will drive foot traffic, regardless of forex rates."I have no doubt it'll bring financial returns," he says. "Given the industry we're in, the investment was a no-brainer."

Source: Bloomberg Europe

Japanese manufacturing activity picked up in November but still remained in contraction territory, while services were strong, preliminary purchasing managers index data showed on Friday.

The S&P Global manufacturing PMI rose to 48.8 in November from 48.2 in the prior month. A reading below 50 indicates contraction, with the sentiment-based print signaling that Japanese manufacturers still remained largely negative over their prospects.

But manufacturing PMI still contracted at its slowest pace in three months, pointing to some improvement.

Sticky inflation, however, pushed up input and selling prices, while overall demand for manufactured goods also remained weak.

Services were a point of support, with the S&P Global services PMI remaining at 53.1 in November, the same as October. This helped Japan's composite PMI rise to 52.0 in November from 51.5 in October.

Sentiment was seen improving marginally as Prime Minister Sanae Takaichi flagged plans for more fiscal support. But doubts over how Takaichi will fund her spending plans also crept into markets, sparking a rout in bonds in November.

Inflation also remained a key concern for business, as both input and selling costs increased. Friday's PMI data comes shortly after government data showed consumer inflation rose as expected in October.

Source: Investing

Source: Bloomberg Europe

UKRAINE DISPUTES TERRITORY LOSS

Source: Reuters

Source: Reuters

Source: Reuters