Page 33 - Bullion World Volume 4 Issue 2 February 2024

Bullion World | Volume 4 | Issue 2 | February 2024

A Paradigm Shift in

Japan’s Gold Market

Mr Bruce Ikemizu, Chief Director, Japan Bullion Market Association

Mr Bruce Ikemizu

Navigating Transformations gold, which occurred only once, to becoming prolific
In the annals of Japan's economic history, a exporters. The catalysts for this transformation were
noteworthy chapter unfolds in the realm of its gold manifold. The introduction of the consumption
market. In bygone decades, Japan stood tall as one tax, initially at 3% in 1989, escalated to 5% in
of the world's major gold importers, with my own 1997, 8% in 2014, and eventually reached 10%
professional journey in physical gold trading at a in 2019. Intriguingly, this tax, ostensibly a financial
trading house during the 1980s and 1990s marked hurdle, paradoxically held advantages for investors.
by the importation of gold from diverse sources such When purchasing gold in Japan, the consumer must
as Australia, Switzerland, London, and South Africa. bear this tax burden, but upon selling the gold, the
However, the dynamics of this narrative underwent a entire tax amount becomes recoverable. In theory, the
gradual but transformative evolution. consumption tax should not pose a deterrent to gold
investment; rather, it should be viewed as a mechanism
The initial catalyst for change emerged with the whereby investors could gain an additional 10% over the
introduction of a consumption tax, and the trajectory selling price, irrespective of the tax rate at the time of
took a more dramatic turn following the bursting of purchase.
Japan's economic bubble in the 2000s. Astonishingly,
Japan, once a significant net importer of gold, However, the implementation of the consumption tax
underwent a 180-degree pivot, emerging as a net had far-reaching and unforeseen consequences for
exporter. This seismic shift in our business operations the Japanese gold market. The profound impact of this
signified not just a change in economic fortunes but tax only became apparent in the early 2000s. In stark
a reorientation of the very foundations of gold trade contrast to foreign counterparts like Hong Kong, where
within the country. gold purchases were not burdened by value-added
During my 14-year tenure at a Tokyo bank branch, a tax, the ease of bringing gold from such tax-friendly
stark reality emerged – we transitioned from importing jurisdictions to Japan without customs declaration

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