There’s no denying it — Japan is having its moment in the rising sun. Open any social media feed and you’ll see it everywhere: the inventiveness of Tokyo street style, the tranquility of a Kyoto teahouse, the satisfaction of a perfectly folded indigo jacket.
More than 3.2 million international visitors arrived in Japan in September, the most recent monthly data available, a 14% increase from the previous year. Between July and September 2025, foreign visitors spent ¥2.13 trillion, an 11% increase from the same period in 2024, according to the Japan Tourism Agency. This builds on the impressive results of 2024, when inbound spending rose to ¥8.14 trillion, up 53% from 2023 and 69% from 2019, and is an indication that people worldwide recognize Japan’s unique position in being home to an array of desirable goods. Investors should seize the moment and look seriously at Japan’s luxury economy as the segment is poised for growth at home and abroad.
Luxury today has evolved far beyond the confines of glittering boutiques and premium designer goods with a French or Italian label. In contrast to the burgeoning next-day fast and disposable market, luxury now encompasses items crafted with precision and years of painstaking mastery. It is defined not by price tags alone but by scarcity and exacting workmanship. In Japan, the luxury landscape — both traditional and modern — is undergoing a profound revaluation. As discerning consumers shift toward authenticity and exclusivity over mass-market excess, the country’s heritage economy is perfectly positioned to meet that appetite. Investors who act now stand to participate in a market poised for expansion.
Japan’s luxury revival is rooted in tradition, not trends
For investors, one of the most compelling opportunities sits in Japan’s traditional luxury ecosystem. The centuries-old crafts and ateliers — known as kogei — have long defined the nation’s aesthetic precision, yet the sector has spent decades struggling.
As domestic lifestyles modernized and mass-produced goods became the norm, demand for handcrafted pieces collapsed, shrinking the market from ¥500 billion in 1990 to around ¥100 billion today. But after years of decline, these crafts are now gaining visibility again, propelled by international consumers, collectors, and visitors who see their artistry and exclusivity as the height of luxury. Edo Kiriko cut glass, handmade kimonos, and other traditional craftsmanship are finding new audiences, and that renewed demand is creating openings investors should not overlook.
This shift is already visible well beyond Japan. Bizen ware (a traditional Japanese pottery style) showed at Milan Design Week, Osafune swordsmiths are cultivating collectors in Europe, and Wajima lacquerware has drawn praise in New York galleries. In fashion, traditional fabrics are being reinterpreted, while split-toe tabi footwear has become a design signature for contemporary brands.
Even in food and drink, collaborations such as a French luxury conglomerate’s partnership with a sake label show how Japanese sensibility can infuse modern luxury with cultural depth. Look at matcha, which has roots in Japan’s mindfulness tea ceremonies. Global demand, coupled with supply challenges, has pushed prices up anywhere from 30% to 75% in 2025. Modern brands are seizing this momentum as well, with Japan’s leading watchmakers showcasing on the global stage and opening flagship stores in major cities such as New York. These stories make clear that Japanese craftsmanship isn’t a museum relic — it’s alive and shaping tastes far beyond its island borders.
A global market hungry for authenticity is rediscovering Japan
This resurgence comes at a moment when the global luxury market is losing steam. Leading luxury groups have shown softer sales, with French conglomerate LVMH reporting a 2% revenue drop in Q1 2025 and a 4% decline for the first half of the year. Years of expansion into mass luxury have blurred brand exclusivity, leaving many labels struggling to connect with a young audience that values experience over possession. For Gen Z, luxury must feel meaningful and ethical. They don’t want to throw money around for the sake of a logo.
Japan is well placed to meet that shift. Its artisanal luxury sector offers what global consumers crave most: a story rooted in culture and authenticity rather than marketing. Underappreciated crafts such as kintsugi (the art of mending ceramics with gold) or traditional sake brewing could be the next matcha juggernaut. Recent collaborations between traditional artisans and contemporary fashion brands show how Japanese craftsmanship can stand alongside the world’s leading luxury houses while staying true to itself. Kyoto’s Hosoo textiles now appear in high fashion and interior design and craft studios are partnering with global maisons.
Still, the path to scale is not without friction. Many heritage houses remain constrained by founder-led structures, limited succession planning, and a shortage of skilled apprentices. Others lack the digital and branding capabilities needed to engage global consumers. Without investment, these crafts risk fading just as the world begins to rediscover them — which is precisely why outside capital now matters.
Investment in Japanese luxury is both a business opportunity and a cultural commitment
With the right support — including capital, international networks, and operational know-how — Japan’s craftsmanship players can grow sustainably while preserving the traditions that make them unique. For investors, it’s a chance to create lasting commercial value while protecting a cultural legacy that might otherwise fade.
Until recently, most private investment in Japan has centered on technology and industry. According to S&P data, inbound merger and acquisition investment in technology-related sectors over recent decades totaled ¥1.7 trillion, which is four times the ¥419 billion invested in consumer durables. But signs of change are emerging. The acquisition of leading Japanese luxury jeweler Tasaki by the Asian investment firm MBK Partners and FountainVest has already led to significant global expansion for the brand. The strongest opportunities lie in brands with deep roots and the capacity to expand without losing authenticity. Textiles offer wide crossover appeal, from Nishijin-ori and other silks to contemporary kimono design, while metalcraft and ceramics bridge art and daily life.
Yet even as the potential becomes clearer, the path forward demands nuance. Doing business in Japan often moves at a slower pace, requiring patience and cultural sensitivity from foreign investors. Founders may hesitate to relinquish control, preferring minority partnerships built on trust rather than rapid change. Many craft houses also face urgent succession challenges, as younger generations choose different careers, and their small scale can make it difficult to grow without consolidation or collaboration.
For those willing to adapt, however, the opportunity is both cultural and commercial. Investing in Japan’s luxury heritage sector is a chance to buy into a scarce and rapidly vanishing resource and its centuries of craft and refinement. Those who move early will not only help preserve this legacy but also hold a stake in its global resurgence — and the reintroduction of a uniquely Japanese sense of beauty to the global stage.