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With the depreciation of the Yen and the macro economic situation more broadly, it was only a matter of time before some of that got passed on to consumers. I’ve heard through some smaller shops in Japan 25%+ hikes from Sanjo are happening on all new orders…
 
ethompson said:
With the depreciation of the Yen and the macro economic situation more broadly, it was only a matter of time before some of that got passed on to consumers. I’ve heard through some smaller shops in Japan 25%+ hikes from Sanjo are happening on all new orders…
Click to expand...
Not to nitpick but shouldn't depreciation of the yen make things from Japan cheaper instead of more expensive?
 
Weak yen should lower prices (all else equal, yes, even when you consider their cost of imported goods goes up, it all ends up cancelling out). However, demand + rising materials prices + their awareness of their market position offsets all of that.
 
ethompson said:
With the depreciation of the Yen and the macro economic situation more broadly, it was only a matter of time before some of that got passed on to consumers. I’ve heard through some smaller shops in Japan 25%+ hikes from Sanjo are happening on all new orders…
Click to expand...

Shouldnt this end up being cheaper since USD has strengthened against the yen? Most of these retailers cost is local and purchased in Yen, no? I would think the price will be lowered and not higher. Take prices at Miura for example. Purchasing in JPY gives you a discount vs their USD prices.

I think the raising prices is more a factor of 'because they can' vs increasing costs for the retailers.
 
iandustries said:
Shouldnt this end up being cheaper since USD has strengthened against the yen? Most of these retailers cost is local and purchased in Yen, no? I would think the price will be lowered and not higher. Take prices at Miura for example. Purchasing in JPY gives you a discount vs their USD prices.

I think the raising prices is more a factor of 'because they can' vs increasing costs for the retailers.
Click to expand...
Yes, the immediate, short-term effect is that for current stock items foreign purchasers often get higher value. However, for retailers who do much or most of their business outside of their domestic market - and Im inclined to believe that there are more high-end Japanese knives sold outside of Japan than within - this can result in some unfavorable price pressures. Larger companies that deal primarily in exports, tend to raise their prices in this type of situation.

It's not that the yen depreciates and all the sudden US customers are paying more from Japanese retailers - you correctly identify the opposite is the case. It's that primarily dollar denominated business (like, say the Sakai and Sanjo wholesalers) suddenly feel price pressures and raise their wholesale prices, which eventually gets passed along to the consumer. It is important to remember that the larger knife making regions are functionally cartels (in the economic, not popular sense - implying NOTHING sinister here). For instance I've heard from a Japanese retailer that many Sanjo makers got together and agreed on price hikes for wholesale orders moving forward to help combat their exposure to a depreciating yen and other macro-economic trends. Prices at the wholesale level take time to trickle down to domestic consumers.

Anyways... regardless of cause, I won't be surprised to see knives we've been used to paying $300-500 for move up into the $450-850 territory. And knives that may have retailed for $1,200 might soon be much more. I was quoted about ¥300k for a Shig Kitaeji yanagi recently from separate sellers...

TL;DR - currency depreciation might cause short term value for us knife buyers buying straight from Japan but long term is liable to lead to price hikes to compensate (or more than compensate) from wholesalers

*I am not an economist, so could be totally off base in my understanding here. Additionally many have far superior understanding of the Japanese knife market than I, I’d defer to them if new info comes up.
 
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I think it's more of a supply and demand thing. Demand grew due to corona as a lot more people got into the hobby. Supply was largely stable as there simply aren't hordes of youngsters aching to become blacksmiths. So why wouldn't you raise prices for sitting in a dark hot forge all day when you can't keep up with demand anyway? Especially when the market is indicating that plenty of people will buy at any price regardless.
 
I think while currency depreciation could cause an increase in price in yen, it would even out when converted back to USD. I agree it’s probably more supply and demand plus general inflation. Also inflation is a good cover to increase prices anyway
 
Yeah these price increases have been happening for the last 5-10 years, especially amongst the more popular knives. A Masamoto KS used to be something like 250 dollars.
 
Better call Leo said:
https://knifewear.com/products/yu-kurosaki-a2-fujin-yanagiba-270mm?variant=38156435980462
This is the first time I see a You Kurosaki Yanagi. Also it's the first time I see him use Blue2 steel.
Click to expand...

Better call Leo said:
https://knifewear.com/products/yu-kurosaki-a2-fujin-yanagiba-270mm?variant=38156435980462
This is the first time I see a You Kurosaki Yanagi. Also it's the first time I see him use Blue2 steel.
Click to expand...
Yup, it is very rare knife. Beautiful f&f by Yu Kurosaki san. Nice round choil for comfort. Polish spine, choil...just feel good in the hand.
 
ethompson said:
Yes, the immediate, short-term effect is that for current stock items foreign purchasers often get higher value. However, for retailers who do much or most of their business outside of their domestic market - and Im inclined to believe that there are more high-end Japanese knives sold outside of Japan than within - this can result in some unfavorable price pressures. Larger companies that deal primarily in exports, tend to raise their prices in this type of situation.

It's not that the yen depreciates and all the sudden US customers are paying more from Japanese retailers - you correctly identify the opposite is the case. It's that primarily dollar denominated business (like, say the Sakai and Sanjo wholesalers) suddenly feel price pressures and raise their wholesale prices, which eventually gets passed along to the consumer. It is important to remember that the larger knife making regions are functionally cartels (in the economic, not popular sense - implying NOTHING sinister here). For instance I've heard from a Japanese retailer that many Sanjo makers got together and agreed on price hikes for wholesale orders moving forward to help combat their exposure to a depreciating yen and other macro-economic trends. Prices at the wholesale level take time to trickle down to domestic consumers.

Anyways... regardless of cause, I won't be surprised to see knives we've been used to paying $300-500 for move up into the $450-850 territory. And knives that may have retailed for $1,200 might soon be much more. I was quoted about ¥300k for a Shig Kitaeji yanagi recently from separate sellers...

TL;DR - currency depreciation might cause short term value for us knife buyers buying straight from Japan but long term is liable to lead to price hikes to compensate (or more than compensate) from wholesalers

*I am not an economist, so could be totally off base in my understanding here. Additionally many have far superior understanding of the Japanese knife market than I, I’d defer to them if new info comes up.
Click to expand...
The increase in price for knives for external buyers due to yen dropping would only make sense if a Japanese maker bought steel or tools from the outside of Japan. For example if Japanese makers are using Swedish steel for their knives and yen fell vs sek then this could cause some increase, but that should be more than compensated by yen falling since steel is a small portion of the price of a knife. Prices are definitely rising, but it is not due to yen falling against other currencies. It seems to be mostly driven by much higher demand from external buyers willing to pay higher prices and possible less supply due to less Japanese makers, but this is not clear and might be relatively temporary. The increased demand seems to be the major driving force.
 
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