Supported by the agency for Cultural Affairs Government of Japan FY2021
Program for Nurturing Upcoming Artists who Lead the Next Generation

Background and Aims

■Although Japan has world-leading figures in the number of museum visitors, artworks are traded, and their underlying asset values are recognized for investment opportunities overseas, there had been little seen of the use of art as an alternative asset. However, in the past few years, young businesspeople purchasing artworks have increasingly attracted attention from the media. 

■The art industry has existed in Japan since ancient times. However, information for understanding the state of the industry is mainly undeveloped, and even the scale of the market was never disclosed in a highly reliable form. Accordingly, Art Tokyo Association, which organizes Art Fair Tokyo, Japan’s largest art fair, and Platform for Arts and Creativity, which offers consulting services for industrial policy and arts and culture, began the annual Japanese Art Industry Market Research Survey in 2016 in order to survey Japan’s art purchasing trends, and analyze and report on the scale and trends in the art market.

■Due to the COVID-19 pandemic, people’s activities around the world have been restricted. Many galleries were forced to temporarily close, and accordingly, the first half of 2020 saw the art market shrivel, but then stock prices rose due to global monetary easing, and asset-based products were snapped-up. Contemporary art also gained attention as an asset-based product.

■In Japan as well, art became recognized as an asset-based product, and from 2020, this report began analyzing data relating to auctioned prices of artworks to first prove that art has an underlying asset value, and also to develop an index to determine the overall market trends over time and assess the valuations of individual artworks.

■There is still a lack of information and tools for the art market in Japan when it comes to this attempt by humanity to create a social structure that doesn’t depend on power, to compare prices by considering the relative merits of value while trading diverse values on a global platform called the art market. The goal of this program is to improve convenience and safety, especially for art buyers (= art collectors).

Structure of this Report

▶️Section 1: Trends and Awareness in Purchasing ArtChapter 1: Report Summary

• Chapter 1: Survey Summary

• Chapter 2: Results of the Market Estimate of the Art Industry in Japan

• Chapter 3: Purchase Structure of Art and Art-Related Products

• Chapter 4: New Art Purchasing Trends in the Pandemic

• Chapter 5: Import and Export of Artworks 

• Chapter 1: Analysis of Public Art Auctions in Japan (2020)

• Chapter 2: Proposal for an Art Index Prototype

• Chapter 3: Comparing Existing Indices with the Art Index Prototype

• Chapter 4: Comparing Existing Art Indices with the Art Index Prototype

• Chapter 5: Issues and Outlook for the Art Index Prototype

• Chapter 1: Trends and Awareness in Purchasing Art (Section 1)

• Chapter 2: Data Analysis Survey of Artwork Prices (Section 2)

• Chapter 3: Future Prospects

Section 1: Trends and Awareness in Purchasing Art

Chapter 1: Survey Summary

➡Research was conducted through an online questionnaire as in previous years, and distributed over the country in terms of gender, age group, employment status, personal annual income, and household income. (However, those with higher income were collected in higher numbers than the national distribution) 

■This survey is based on a questionnaire survey for respondents supplied by an online questionnaire service. It was conducted in two stages: the first survey and second survey. The first survey collected 24,959 samples, and the second survey was conducted with respondents from the first survey who had bought a work of art for the first time after April 2020.

■As in previous surveys, in order to estimate the scale of the market across the whole of Japan, the first survey was distributed across the country in terms of gender (two groupings), age (six groupings), employment status (employed or unemployed), and income (9 groupings for individual income for employed people, 6 groupings for household income for unemployed people), based on 2020 data on the labor force from the Statistics Bureau of the Ministry of Internal Affairs and Communications. Additionally, as people with higher income are thought to purchase more art, there were more surveys collected from people with higher individual and household incomes than the actual national distribution of income, and this was weighted in the analysis to fit with Japan’s overall distribution.

■Criteria were set for data from the original collected sample that demonstrated a contradiction or unrealistic result in regard to the amount of a purchase and removed those surveys from the analysis.

Basic Attributes of Respondents to First Survey

➡ Similar distribution of gender, age, personal income, and household income to the actual distribution across Japan.

Survey Question Topics

➡ Note that the annual purchase cost of artworks was estimated from the total purchased cost in the last three years.

■The following topics are surveyed every year in order to estimate the scale of the Japanese art market

Definition of Art Industry and Market

➡ The art industry and market were defined through the total values of (1) the market for works of art, (2) the market for art-related products, and (3) the market for art-related services

For Reference: List of Survey Questions

Chapter 2: Results of the Market Estimate of the Art Industry in Japan

Results of the market estimate of the art industry in Japan: Issues, Summary, and Discussion of Survey Results

[Survey Background / Issues]
■This sort of estimate of market size had never been done before, so we began releasing market reports on the art industry in Japan in 2016, and have been estimating and observing it every year since then.
■It is said that the art market is booming in recent years, and we believe this survey has a growing social role to play in order to discuss the realities of the art market.
■Since 2020, the art market has also been greatly impacted by the COVID-19 pandemic, and this has been both a negative impact and a positive impact like the above-mentioned art boom moving in parallel, so this year we put emphasis on analyzing the changes comparing 2019 and 2021.

[Summary and Discussion of Survey Results]
■Compared to 2020, which had a large impact from the COVID-19 pandemic, the art market recovered in 2021, but it was still lower (-15%) compared to 2019 levels. 
■Art-related products experienced a larger impact than works of art and were still much lower (-51%) than 2019 levels. The main purchase channel for art-related products is shops in places like exhibition venues and art museums, so it is estimated that people avoiding touching products and spending a long time in crowded areas had an impact.
■Meanwhile, the demographic of purchasers has greatly changed compared to before the pandemic, and the percentage of people making big-ticket purchases has grown. According to auction data, the prices of artworks by modern artists is going up, and it is not only an increase in purchasers, but an increase in unit price that we can expect to have a big impact on the market in the future. 

Text: Akiyoshi Watae (Platform for Arts and Creativity)

2021 Survey Result Summary

➡ (1) Market for works of art – 218.6 billion JPY
(2) Market for art-related products – 24 billion JPY
(3) Market for art-related services – 35.5

Reference: 2021 Survey Results Summary (compared to the previous fiscal year)

Market Scale by Type

➡ Yōga and ceramics were the most purchased.

*Note that the figures for purchases by type include duplicates, meaning the total amount for purchases of works of art differs from the total amount of purchases of works of art by sales channel.
(The values per channel are used for the art market so there is no overlap)

Market Scale for Works of Art by Sales Channel

➡ Galleries became a major channel. 

Changes in Market Scale (1/2)

➡ Compared to 2019, the artwork market is down 15%. Compared to the global drop (2018 -> 2020: -26%), the decline is relatively modest. Art-related goods that are mainly sold at exhibitions declined sharply.

Changes in Market Scale (2/2)

➡ Galleries in Japan are doing well. Department stores are on a big downward trend.

Changes in the Global Art Market

➡ Compared to 2019, the scale in 2020 dropped 22% (approximately $50 billion (approximately 5.2 trillion JPY). This is 26% decline compared to 2018.

Changes in the Global Art Market

Share within the Global Art Market

➡ In 2020, the global art market was 5.2 trillion yen, and Japan’s domestic art market scale was 192.9 billion yen according to this survey, making Japan’s share of the global total 3.7%. Considering the differences in exchange rates, it has increased from the 2019 share of 3.2%.


*As there are differences in estimation methods and definitions when estimating market scale, this figure should be treated only as a basic point of reference. The Japanese Art Industry Market Research Report’s estimates for the purchase amounts for artworks purchased by Japanese people resident in Japan are compared to the estimates of purchase amounts of people around the world according to global data from Art Basel & UBS “The Art Market 2021.
*Additionally, the Art Basel & UBS “The Art Market 2021” updated its figures for the 2019 art market scale, so the figures do not match those from last fiscal year’s report.

Scale of Global Art Market by Country (2020)

Reference: Percentage Change in Global Art Market

Proportion of total purchased price of artworks and number of respondents by price range during the past three years

➡ Compared to pre-covid times (2019) the percentage of people making large purchases is going up.

Proportion of Total purchased Price of Artworks and Number of Respondents

Chapter 3: Purchase Structure of Art and Art-Related Products

Purchase Structure of Art and Art-Related Products: Awareness of Issues and Survey Result Summary/Considerations

[Survey Background / Awareness of Issues]
■It is often said that it’s not possible to sell artwork in Japan. Even in this survey, Japan’s market scale is estimated to be 3.7% of the global art market and compared to Japan’s economic scale it is certainly not a big number. There have been a variety of theories and arguments about the reasons why “art doesn’t sell,” but there are still not enough materials to verify anything. In order to provide one source of material for this discussion, this time we surveyed people’s reasons for purchasing art.
■Additionally, in this survey, we added the phrase “art-related products” to represent replicas of famous paintings on posters, postcards, art books, and other merchandise based on famous paintings, sculptures, and so on. Every year in this survey, we have shown that the number of purchases of art-related products exceeds that of artworks. From this we can say that in Japan while “art doesn’t sell,” “art-related products do sell.” In other words, Japanese people strongly prefer to live surrounded by art. This survey also reveals the purchase structure of these art-related items.

[Survey Results Summary/Considerations]
■The survey showed that the most common reasons for buying art were “to decorate living space,” “liked it and bought it on impulse,” and “to use as a practical object.” With regards to decorating living space, Japan’s houses have always been said to be small, so once the limited wall space is filled, and with practical objects as well, once there are sufficient practical objects, the incentive to buy more is lost. With this survey, this bottleneck might explain the result that “many people don’t buy art even if they are interested in buying it.”
■Meanwhile, the other common reason for buying art, “liked it and bought it on impulse” does not encourage habitual purchases. However, not many people selected reasons that do encourage habitual purchases like “to collect” or “investment/management.” Purchasers of high-priced artworks did often give “to collect” as a reason, but not many chose “investment/management.”
■Meanwhile, the reason for purchasing art-related products had “want to display favorite works” as the top answer by far.
■From the above, we can say that a lot of Japanese people buy art for the pure joy of it, and in some cases if it’s a piece they like, they’re not strongly committed to owning the real thing. In a sense, it is a very materialistic view of art. At the same time, this could explain one reason why the market itself is stagnating. The “realization of a society where people can easily enjoy art” and “the expansion of the art market” may not necessarily be coaxial concepts. 

Text: Akiyoshi Watae (Platform for Arts and Creativity)

Purpose of Purchasing Art

➡ Most common are “to decorate living space,” “liked it and bought it on impulse,” and “to use as a practical object.”

Purpose of Purchasing Art Products
*Compared with purchasers of high-priced artworks(More than 1 million yen over three years)

➡ Purchasers of high-priced artworks tended to be more likely to “collect” or “support the artist.” The structure is very different from the whole.

Interest in Purchasing Artworks / Replicas

➡ Both have 4% “interested” and 13–14% “somewhat interested.”

Structure of Interest in Purchasing both Artworks and Replicas.

➡ There were a limited number of people interested in purchasing artworks and replicas, with 12% “interested” and 5-6% “somewhat interested.”

Interest in Purchasing Artworks and Replicas, and the Purchase Situation

➡ Even if they are interested in purchasing artworks, only 20% of people have actually bought art in the past three years (10% of people who are “somewhat interested”) and the same trend can be seen with replicas. Even if people are interested, it isn’t leading to actual purchases.

Chapter 4: New Art Purchasing Trends in the Pandemic
New Art Purchasing Trends in the Pandemic: Awareness of Issues and Survey Result Summary/Considerations


[Survey Background – Awareness of Issues]
■The COVID-19 pandemic was the trigger that resulted in the sudden spread of work-at-home.
*According to the “COVID-19 Questionnaire” conducted by Tokyo Shoko Research, by March 2021, work-from-home measures were implemented by 69% of large companies, and 33% of small and medium-sized companies.
■With the increase of work-from-home, there was a hypothesis that “spending more time at home, and increased interest in the home setup”, and “increased concern about one’s background during things like meetings” would result in an increased interest in purchasing art. In actuality, Teikoku Databank has shown survey results that indicate fiscal year 2020 was the biggest year ever for the furniture and interiors market.
■In order to prove this hypothesis, survey respondents who had purchased art for the first time after April 2020 were asked about the “impetus for purchase”, “genre of first piece purchased,” “sales channel” and so on. (The strengths and weaknesses of different channels in drawing in new purchasers was analyzed as well)


[Survey Result Summary/Considerations]
■Overall, 18% answered that they bought art because of “increased time at home due to spread of COVID-19” which is not an incredibly high degree of impact, but it does indicate that the penetration of work-from-home has provided a boost to the purchase of art.
■Perhaps unrelated to COVID-19, analysis of new art purchasers indicated the strength of galleries as a purchase channel.
■The survey indicated that one strength of galleries was the ability to capture impulse purchases as “happened to see a piece I liked on display at the store” was a common answer, but the weakness of galleries was shown in responses like “physically not an easy location to access” and “psychologically not easy to enter the store or see the works.”
■Strengths of department stores were “carries a wide range of artists’ work” and “carries a lot of easy-to-display works.” In a sense, Japan’s galleries are often comparatively small-scale businesses, and they do not provide enough value, which is supplemented by department stores, and the two genres mutually support the distribution of artworks.
■However, in recent years, department stores have been increasingly pulling out of regional cities. If the industry is to fulfil consumer needs in the same way as it has been, perhaps Japan’s galleries will need to get serious about teaming up to enhance the diversity of their offerings and strengthen online sales.

Text: Akiyoshi Watae (Platform for Arts and Creativity)

Impact of degree of increase/decrease in work-from home  

➔Those who work from home more often due to the Corona disaster are more likely to buy art than overall. How much they work at home also affects such degree.

Reference: Timing of artwork purchases

Impetus for Purchase

➡ By far the most common was “just happened to find something I liked” but coming in second, “increased time at home due to the spread of COVID-19” was also common.

Genre of first purchase

➡ Genres like yōga and ceramics were the most popular

Purchase Made with Awareness of Channel, or First-time Channel

➡ In both categories, “Gallery in Japan” was the highest, with people who weren’t even aware of the channel using it to purchase art. Not many people were aware of “Department stores in Japan” as a channel, but it tended to be selected as a first purchase channel.

Reasons for Purchasing from Each Channel

➡ The top reasons for galleries were, “happened to see a piece I liked on display or in the store” and “the gallery carries work by an artist I like,” while department stores had “has a wide range of artists’ work, “ and “carries a lot of easy-to-display work” as the two most common reasons.

Reasons for not Purchasing from Each Channel

➡ Main reasons for not purchasing from galleries included “physically not in an easy location to access” and “psychologically not easy to enter the store or see the works.”

Reference: Reasons for purchasing at a gallery in Japan

Reference: Reasons for purchasing from a department store (including mail order and out-of-store sales

Reference: Reasons for purchasing from an internet site

Reference: Reasons for not purchasing from a gallery

Reference: Reasons for not purchasing from a department store in Japan (including mail order and out-of-store sales)

Reference: Reasons for not purchasing from an internet site

Chapter 5：Artwork Imports and Exports

Artwork Imports and Exports: Survey Method/Survey Target

➡ The analysis of the state of artwork imports and exports uses the Ministry of Finance’s official trade statistics and defines artworks as the four categories of “calligraphy and paintings,” “collages and similar decorative panels,” “copperplates, woodblocks, lithographs, and other prints,” and “sculptures, clay figures, cast figures, and similar sculptural items.” 

Changes in Value of Art Imports and Exports

➡ 2018–2019 year-on-year imports dropped but increased for 2020–2021. 
Exports plummeted in 2020 and recovered a little in 2021. 

Change in Number of Imports and Exports of Calligraphy and Paintings

➡ Even export numbers are sluggish from 2020 onward. 

Change in Unit Prices of Imports and Exports of Calligraphy and Paintings

➡ Compared to exports, the trend towards higher import unit prices continues.

Section 2: Data Analysis Survey of Artwork Prices

Chapter 1: Analysis of Public Art Auctions in Japan (2020)

➔ Although the number of sales were high on art auctions in 2020, the total trading value declined.


With the impact of the pandemic, there was a hypothesis that the total trading value, number of auction sales, and the average value of each sale would be lower in 2020 compared to 2019, and we checked the collected data. The results were that total trading value was higher in 2019, as predicted. However, the figure is higher in comparison to the years up to 2018, which had been rising until 2019 and the Japanese art auction market would have likely been higher in 2020 than it was in 2019 if it had been able to continue on that trajectory. Because of this, while the numbers were down from 2019, trade frequency is estimated to have not changed that much.

Next, looking at the number of auction sales, there were more in 2020 than in 2019, and the upward momentum was maintained. Looking at the total transaction value divided by the number of sales, the average sale was higher in 2019. In other words, while the number of sales was higher in 2020, the successful bidding price of the works was likely on average higher per item put up for auction in 2019. This seems to be the case as the median successful bid price was also higher in 2019.

In 2020, the art auction market was tight worldwide, but one characteristic was that online auctions got more active. According to The Art Market 2021, published by Art Basel and UBS, 25% of the world’s total trading value was done online. Looking at Japan, services like telephone bidding and bidding in advance on the auction house’s website were available. However, through the pandemic we have begun to see cases where auctions are held completely online, or auctions where both in-person and online participation is possible. Although there are adverse aspects of operating online like it is not possible to see the art in person, but the art auction market in Japan seems to be undergoing a shift to online.

As a result, the data collected from 2020 shows more auction sales compared to 2019, but the average and median prices were lower, and the total trading value was also probably lower. If most of the works being auctioned online or are easy to auction online are in the lower price range, the number of auction sales may increase but the total trading value will not. Although this is only a guess based on the figures, and the possibility is still there that the trading situation will change compared to how it has been as online auctions get more active. Of course, Japan’s auction houses are still working on the shift to digital and online operation. They may continue to emphasize offline operations. However, some artworks, such as the recent NFT trend are appearing mainly online. It is certain that the online art auction market will become even more online oriented in the future.

Chapter 2: Proposal for an Art Index Prototype 

Proposal for an Art Index Prototype 1:
Art as an asset, weighing risk and return.

Value of art as an investible asset
The wealthy demographic, especially in the West, invest in art in addition to well-known asset classes such as stocks and real estate. The root motivation is the asset protection power of art as an asset. To cut to the point, art is a real asset that moves in value differently than traditional financial assets.

Management of asset classes can be divided into two categories. One is to have the assets work and earn a reasonable return. The other is on the other side of the equation, which is to reduce the risk of an asset declining as much as possible. In order to do so, the common way in the asset management world is to diversify investments across several different asset classes with different price movements. Investment in art plays a big role in this context.

　Now, how is the value of art measured? Although the value of art involves artistic importance and historical evaluation through time and environment, it does not fundamentally deviate from ordinary economic principles. In that sense, it is important to analyze historical price data. This is especially important if art is to function as an asset.

In order to grasp the state of the art market, what is needed is an index, just like stock price indexes. If price data is aligned and statistically processed, it would be theoretically possible to create such an index. Tools like these could help lower the barrier to entry for viewing art as a real asset. If there was an index that could visualize the returns of the entire market like stocks and bonds, and provide a view of the market over time, it could help investors to consider art a real investible asset. In this sense, it’s very important. In other words, if it becomes possible to manage risk and return, people could treat art as a portfolio asset like other financial assets. If such benchmarks can be stably supplied, it will contribute to the elimination of information asymmetry, and the greatest treasures of humanity, masterpieces, could penetrate society in a way that allows them to be managed in safe place in a stable manner. In other words, it will contribute to the protection of cultural assets. Moreover, it will be financed entirely by private funds and be self-supporting.

As this is a challenging topic, this chapter will discuss it using an art index prototype. The domestic art auction market will be reviewed and compared to existing financial assets.

Proposal for an Art Index Protype 2:
Definition of an Art Index

Screened and indexed to the top 50% of artists in terms of sales value
In order to treat art as a real asset, there is a need to be able to separate the wheat from the chaff and designate art that can be treated as an asset. Naturally, the minimum conditions for selection are simple criteria that eliminate arbitrariness as much as possible so that art can be judged based on market principles (further development of conditions are difficult at this stage because it depends on the maturity of the market).

Data that passes this screening would next have to be indexed. This is in order to allow the health of the overall market to be monitored by applying certain functions, just like traditional financial assets like stocks and bonds. Otherwise, investors will not be able to find stable and rigid asset values that they can trust, and the overall market value will naturally decline.

In following, this art index prototype was based solely on artworks that have asset value. The index composed of those artworks was created as an indicator to provide an overview of the market as a whole. One method to provide this overview would be to cover all artists whose work is listed on Japan’s art market, just as the TOPIX covers all listed stocks. However, actual data shows that not all artists can guarantee sufficient liquidity as real assets. If artists that are not liquid are included, the asset index may not be able to function as a benchmark for asset quality, so the development of the index must include a screening process. Please note that the rights to the index including copyrights, are reserved by QUICK Corp.

Proposal for an Art Index Prototype 3:
Art Index Calculation Process  

 Since the selected artists’ works were split into categories such as nihonga and contemporary art, those categories were additionally split into artists’ works that are only distributed domestically or if they are also distributed internationally. When considering art as a real asset, it is important to consider whether it is regularly traded on the market or not. While it is essential for artworks to be able to be sold at any time for about the same amount as was paid for it, it also has to have enough liquidity that it can be sold for more than it was bought for. Liquidity-wise, works that are only traded on domestic auctions have lower liquidity compared to works traded on the international auction market. The more limited the market, the more the liquidity drops. With this in mind, the indexes developed were split into the three broad categories of Domestic Art, Contemporary Art, and Foreign Art. 

Domestic Art：Group of liquid artists circulating mainly within Japan. They have a certain degree of circulation on the domestic market and are actively traded but are not really traded internationally.

Contemporary Art：A group of contemporary artists (=group of artists traded nationally
and internationally). Unlike the above, their works also have liquidity on an international level.
 

Foreign Art：A group of international artists that don’t belong in the Contemporary Art category. This category contains international works that are in categories other than contemporary art. Modern artworks and so on are not traded as much as contemporary art, but they are traded internationally and the works have sufficient liquidity.

 Domestic Art: Prices have been falling since 2006, and since 2009 it has been hovering around 500. It has stayed around half the average price it traded at in 2006, so a piece purchased around 2009 was likely worth the same if it was sold in 2019. However, we do not see the liquidity available to sell above that amount. Of course, individual artists and works may have different results, but Domestic Art on the whole is not very liquid. 

 Contemporary Art: Although prices are up and down, they have been on the rise since 2009, and is highly possible to exceed purchase price when selling. Of the three groupings, this one has the highest liquidity. A piece purchased in 2007 may or may not have been able to get the equivalent price in 2019. 

 Foreign Art: Like Contemporary Art, it is fetching prices over 1000 consistently, but in comparison it has been weak since 2014. Even so, it still maintains higher values than Domestic Art. The important factor is when a piece you own was purchased. A piece purchased between 2009 and 2013 and sold in 2014 would have had higher value and would have been more liquid. However, taking the downward trend since 2014 into consideration maintaining that liquidity is also less certain if trying to sell the piece in 2019. 

 Looking over all three artist groups, values in 2009, the year after the 2008 financial crisis, were significantly lower than the previous year overall, and auctions in 2009 were weaker than the second half of 2008, indicating that the impact of the financial crisis lagged behind the financial market. In other words, the art index may be viewed as a lagging indicator of financial markets. 

Chapter 3: Comparing Existing Indices and Financial Products with the Art Index Prototype 

 

Comparing Existing Indices and Financial Products with the Art Index Prototype 1: S&P 500

A Strong Positive Correlation with Contemporary Art 
 Art is characterized as a low-liquidity asset, and there is a need to rebalance and optimize it when it’s included in a portfolio, although it is difficult to manage it together with more traditional financial assets which are more liquid. The art index prototype is made with this sort of use in mind. 

 Here, we will see how it actually compares to existing stock indices. In order to compare the art index with existing indices, both were scored as 1000 in 2006. 

 First, the S&P 500 was used to compare as a representative of foreign indices. The chart in Fig. 9 includes the S&P 500. The grey line is the S&P 500, and the other colored lines represent each artwork group as shown in the legend. The S&P 500 movement shows that it fell sharply due to the 2008 financial crisis, but since then until 2017 it has maintained an upward trend. It fell in 2018 but rose substantially in 2019 and looking at it overall from 2006 it has remained strong. 

 Compared to the S&P 500, Domestic Art has clearly remained sluggish. Foreign Art only rose in a similar way from 2009 to 2010, but the rest of the time it showed completely different movements. Contemporary Art shares similarities in that it has been going up since 2009 with S&P ahead of it, dropping in 2008 and 2018, while Contemporary Art dropped in 2009 and 2019. This shows the characteristic of art markets reacting later to financial markets. Overall, the growth trends were similar. 

 The correlation coefficients in Chart 2 show a strong positive correlation with Contemporary Art, which are the internationally traded artworks, and the chart indicates a strong association. There was a weak positive correlation with Foreign Art and a very weak negative correlation with Domestic Art. 

 From 2009 to 2012, TOPIX was sluggish like Domestic Art, but it began growing in 2013, and by 2017, it was the same shape as Contemporary Art. From 2012, Abenomics started and TOPIX felt its effects, and the money may have flown into the Contemporary Art works as well. In 2018 when TOPIX fell, Contemporary Art went up, but in 2019, TOPIX went up and Contemporary Art went down. This could indicate that Contemporary Art was reflecting the weak financial markets a year later, in 2019.  

 When compared with Foreign Art, broadly speaking, it seems to rise when TOPIX rises, but it is difficult to find more than a temporary relationship. It is possible that Foreign Arts is moving without being affected by the domestic stock market. 

 Looking at the correlation coefficients in Chart 2, there is a strong positive correlation for Contemporary Art as seen with the S&P 500. As can be read from the chart, when the domestic stock market rises, Contemporary Art also strongly tends to rise with it. However, Domestic Art showed a very week correlation, and statistically speaking, there was no movement related to TOPIX. As for Foreign Art, while not strong, there was a positive correlation. When looking at the chart, there was a temporary period of growth while TOPIX was rising, which seems to be statistically related to TOPIX.

 There is only data available for Bitcoin from 2014, so this chart is calculated using 2014 as the base year. In addition, since there is a big gap in value between Bitcoin and the art index, a logarithmic graph was used. The results can be seen in Fig. 6. As in the legend, Bitcoin is represented by the grey line, which clearly moves differently from the art index. In fact, the correlation coefficient was lower, as shown in chart 3. 

 Compared to the Art Index, its movements do not resemble any of the artwork groups. There are some parts where they have gone up and down in the same way, but overall it is a different movement. However, the correlation coefficients in Chart 4 show that there is a strong negative correlation with Domestic Art. In other words, only Domestic Art has a strong association with NYMEX Gold moving in the opposite direction. 

 Compared with the art index, Contemporary Art and Domestic Art don’t really have a similar movement, and although they do go down in the same way during certain periods, there are no common points overall. With Foreign Art as well there are no common points but there were some characteristic movements. When Foreign Art is weak, WTI Oil is strong, and when Foreign Art is strong, WTI Oil is weak. Looking at the correlation coefficients in Chart 5, Foreign art has a negative correlation, though not a strong one. 

 The unit price of 10-year US Treasury bonds has been on an upward trend from 2006 to 2008, which is thought to be the result of funds flowing into U.S. Treasuries, which are considered safe assets, in the wake of the 2008 financial crisis. After that, the price fell as the economy recovered, and remained near 1000 until 2019. As it is said to be a safe asset compared to stocks, it has shown stable movements. 

 Comparing US Treasuries and the Art Index on this chart, the movement is quite different from any of the art categories. The correlation coefficients in Chart 6 showed no strong correlations among all the art categories, and Contemporary Art had a particularly weak positive correlation.  

Chapter 4: Comparing Existing Art Indices with the Art Index Prototype 

Comparing Existing Art Indices with Art Index Prototype Deciphering the Points Necessary for Practical Application of Artprice Indexes 

 It is certainly true that the art index here is not enough for actually buying and selling art as an asset. This report compares it to the Artprice Indexes, an art index that is used internationally with publicly-available data, and explores the points necessary for the practical application of art indexes. 

The Artprice Indexes are provided by France-based artwork price information provider ArtMarket.com and its division, Artprice.com. It has data starting in 1998, and makes calculations four times per year (once every quarter). With 23 years of data already in existence, the index is a sufficient reference point for art that is supposed to be for long-period retention. Also, the calculation intervals were shorter than one year.   

The Artprice Indexes are calculated based on transaction data collected by Artprice.com excluding antiques and furniture, and this is one thing it has in common with our prototype. However, they calculate more than three types of indexes, including the Global Index, which acts as a general index, an index for each category of works such as paintings and sculptures, indexes classified in various way such as artist’s birth year, contemporary, post-war, and so on. The Artprice 100 index is calculated by selecting only artists that meet certain criteria regarding assets and liquidity. 

In Figure 10, the Artprice Indexes are drawn together with the prototype art indexes. The Artprice Indexes used include the Global Index and several other indexes such as classified by the artist’s year of birth, contemporary, and post-war. Since Artprice Indexes are calculated relative to the year 1998 as 100, the prototype art index was converted to a base value of 100 accordingly. As a result, the Global Index, which is the overall index of all the Artprice indexes, reached the 200s at its highest, and the difference between the prototype and the Artprice Indexes is not that high. However, the performance of Post-War and Contemporary are higher than any of the prototype indexes. This indicates that it is helpful to have indexes such as Post-War and Contemporary to sort artists and artworks into identifiable categories. 

 Based on these art indexes that are actually in use, we realized the importance of calculation periods and intervals, and of preparing a global index that can grasp the entire market, as well as indexes that can decipher the situation in each field to make it more useful for practical purposes.

Chapter 5: Issues and Outlook for the Art Index Prototype 

 Meanwhile, when we interviewed experts familiar with Japan’s art auction market and financial industry professionals, we found some issues that need to be addressed before it can be used in practical application. For example, some people thought the calculation period should be lengthened. Art isn’t traded as often as stocks and tends to be held for long periods of time. Because of this, the data available should be longer than that period. There were other points raised as well, and all of them are issues that must be addressed before the art index prototype can be put into actual use. 

 The next step is to address these issues by incorporating data form overseas. Considering art as an asset, it’s important to that the artists and works are also traded abroad. In that sense, by adding data from auction companies in other countries we can improve the accuracy of our design and analysis. Additionally, by using data from overseas, we will also be able to compare the Japanese and overseas art markets, which will aid in analysis of characteristics of the Japanese art market and trends of Japanese artists in the art market. In these ways, we can gain new perspectives on Japan’s art markets and artists from Japan, which will serve as a steppingstone to attracting new customers and expanding the domestic art market. 

Section 3: Considering Art Fair Tokyo 

Chapter 1: Trends and Awareness in Purchasing Art (Section 1) 

About “Purchase Structure of Art and Art-Related Products (Chapter 3)Fine Art: Need to analyze trends by range due to broad range of prices 

Art-Related Goods: Products unique to Japan, which boasts an exceedingly high number of museum-goers compared to other countries 

Text: Kiichi Kitajima (aTOKYO Co., Ltd.)

About “New Art Purchasing Trends in the Pandemic (Chapter 4)”Purchases made mainly at galleries. Trust is key for online purchases.

Text: Kiichi Kitajima (aTOKYO Co., Ltd.)

About “Import and Export of Artworks (Chapter 5)Cross-border buying and selling is expected to increase (Both import and export)

Text: Kiichi Kitajima (aTOKYO Co., Ltd.)

Chapter 2: About “Data Analysis Survey of Artwork Prices (Section 2)

Importance of Grasping the Market Frontier

Text: Kiichi Kitajima (aTOKYO Co., Ltd.)

Chapter 3: Future Prospects

Helping the Art Market Grow

Text: Kiichi Kitajima (aTOKYO Co., Ltd.)

Japanese Art Industry Market Research Report 2021
Supported by the Agency for Cultural Affairs’ “Program for Nurturing Upcoming Artists who Lead the Next Generation, 2021

Organizers: Agency for Cultural Affairs, Art Tokyo Association
Production: aTOKYO Co., Ltd.
Survey Design, Analysis and Report: Section 1 – Platform for Arts and Creativity

Section 2 – QUICK
Section 3 – aTOKYO Co., Ltd

Credits
aTOKYO Co., Ltd,　CEO :  Kiichi Kitajima
Platform for Arts and Creativity, Representative Director. :  Akiyoshi Watae　　　
QUICK Corp. IT Infrastructure HQ. :  Yoko Ishii
University of Toyama, School of Economics. :  Koji Karato
Tama Art University Department of Art Studies. :  Atsuo Ogawa
Nomura Institute of Capital Markets Research, Principal Analyst  :  Satoshi Takeshita

General Survey Inquiries



aTOKYO Co., Ltd,　CEO :  https://atokyo.jp

Platform for Arts and Creativity, Representative Director. :  http://www.pac.asia
　　
QUICK Corp. IT Infrastructure HQ. :  https://corporate.quick.co.jp