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Published On: Tue, Sep 30th, 2014

Japan art market boosted by Abenomics after years in the doldrums

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By Megumi Lim

Just a decade ago, a lithograph by Japanese artist Yayoi Kusama sold for several hundred dollars at best. But now her pieces, some just the size of a magazine, can fetch as much as $74,000.

Japan’s long dormant art market has been turbo-charged by economic policies that have dragged the nation from decades of deflation, as well as by the weakening of the yen, spurring demand for post-World War Two and contemporary works both at home and abroad.

Japan’s art collectors were once known for their aggressive bidding during the booming 1980s even before a domestic art auction market was formally established. Collectors bought works directly from museums and galleries, paying sky-high prices set by sellers without complaint.

Overseas, they were famed for paying record-breaking prices for noted works, such as Vincent Van Gogh’s “Sunflowers,” purchased by an insurance company.

But the bursting of the asset-inflated bubble the following decade sent art prices in Japan plunging by more than 80 to 90 percent, leaving collectors traumatized for decades. Further pain came with the 2008 global financial crisis.

Now, with signs of economic recovery under Prime Minister Shinzo Abe’s policies, known as “Abenomics,” the art market is reviving as well as the Nikkei stock index pushes to multi-year highs – and the yen falls to multi-year lows.

“Abenomics has had a positive impact on the art market, surprisingly rather more on the seller side due to the weakening yen,” Yasuaki Ishizaka, the president and managing director of Sotheby’s Japan, founded in 1979, told Reuters recently. A weaker yen usually helps bolster business and investor sentiment because it boosts the exports that are a key driver in Japan’s economy. It also encourages collectors to sell their art to foreign buyers since buyers are willing to pay more because their money goes further.

Turnover in Japan’s art market for the first half of 2014 hit $30.7 million. That puts it on course to top last year’s $54 million and possibly challenge 2012’s $76 million, the highest since 2009.

“Buying is increasing in Japan, but because of the long period of stagnation, the market is still in the midst of regaining momentum,” Ishizaka said.

Especially popular at present are works by “Gutai,” Japan’s most influential avant-garde group, whose name means “Concreteness” and was founded in the western Japanese city of Ashiya in 1954, when memories of wartime totalitarianism were still fresh.

Its members used unconventional materials such as smoke, light and sound due to their belief that art should “impart life to matter” by “merging human qualities and material properties,” as they wrote in their manifesto.

Many “Gutai” works appear to be chaotic splashes of paint on a canvas, some in just one color, such as black or red. Jiro Yoshiara’s “Work” consists only of a black circle on a brown background. Others incorporate objects as “found” art.

The group only had about two collectors until a few years ago, gaining popularity after a ground-breaking exhibit at New York’s Guggenheim Museum in May 2013 and growing interest among foreign collectors. A fiery red 183 by 229 cm (72 by 90 inch) abstract work called “Gekidou Suru Aka” – “Dynamic of Red” – by Kazuo Shiraga, who was known to paint with his feet, set a world record for a Gutai work with a hammer price of 3.9 million euros ($4.95 million) at Sotheby’s Paris auction in June 2014.

“Gutai’s works are especially popular among European and American collectors,” said Tomoaki Takahashi, spokesman at art house Mallet Japan.

“Unlike figurative art, which is very popular here, foreign buyers are able to appreciate abstract works more because of their universality.”

Japanese auction houses, which deal with mostly domestic clients, are also seeing better times.

“There is an increase in purchases, definitely a sign of recovery from when the art market hit rock bottom during the economic crisis in 2008,” said Hirotarou Ando, a spokesman for Japan’s largest domestic auction house, Mainichi Auction.

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