【Japan】Why Gold is at Historic Highs, Up 140-Fold in 55 Years

In recent years, news of “gold hitting record highs” has become increasingly common. In January 2026, the price on the New York market surpassed $5,000 per troy ounce (approximately ¥770,000) for the first time in history, representing a roughly 140-fold increase over the past 55 years. Precious metals specialist Yuichi Ikemizu states that “gold is destined to keep rising.” This article explores why the value of gold has surged so dramatically.

I established the Japan Bullion Market Association (JBMA) in 2019 and, as its representative director, engage in activities such as holding seminars on precious metals investment and connecting overseas traders with the Japanese precious metals market.
My involvement with gold began when I joined Sumitomo Corporation after graduation and was assigned to the precious metals department. For 40 years since, I have been observing the gold market, and I feel that gold’s position in investment has changed significantly in the last 2-3 years.
The typical characteristic of Japanese investors until now has been that of “bargain hunters”—buying when prices fall and selling when they rise. However, now they buy even when prices are rising. They buy even when prices are falling. At precious metals shops, lines form from the morning with people seeking to buy gold bullion.
The reason for this heightened interest in gold is that people have become aware of the risk that “holding cash will lead to its continuous erosion” due to inflation.
Since the COVID-19 pandemic subsided, some people who traveled abroad may have been astonished by the high prices. My first trip overseas after the pandemic was to Singapore. I had an image of 1 Singapore dollar being around ¥65, but at the airport exchange, it was over ¥100. I instinctively checked the rate on my smartphone. Recently, I went to the UK, and a simple breakfast cost £28 (nearly ¥6,000). I’ve had to vow to myself not to convert prices to yen when abroad, otherwise I can’t enjoy myself or do anything.
These high overseas prices also reflect the weakness of the Japanese yen’s purchasing power. When considering how to mitigate the effects of Japan’s inflation and further yen depreciation, the quickest solution is to buy yen-denominated gold.
However, even so, what potential gold buyers likely want to know is, “Will gold prices continue to rise in the future?”

I believe that precious metals, starting with gold, are “destined to keep rising.” The primary reason is the clear trend of currency devaluation. Simply put, capitalism is based on the idea that “using money makes everyone happy.” Consequently, more and more currency is printed, leading to its devaluation. This process is being accelerated by the Trump administration and Japan’s “responsible proactive fiscal policy.”
In the recent House of Representatives election, each party proposed “tax cuts” as a campaign pledge. But if the revenue source like consumption tax disappears, where will the money come from? Ultimately, the only option is to issue government bonds and incur debt. That will surely lead to a weaker yen. Currently, Japan’s long-term government bonds are being sold by foreign buyers, driving up long-term interest rates. From a foreign perspective, it’s shocking to hear promises of tax cuts in this situation, but the Japanese themselves seem to lack a sense of crisis. This is a point of great personal concern for me, which is precisely why one should buy gold, and I believe gold prices will continue to rise.

Why has the Japanese yen become so weak? The reasons can be understood from the book ‘The 40-Year Secret History of the Yen-Dollar War: Why the Yen Became the Weakest Currency’ by Takeshi Kawanami.
The Plaza Accord signed in New York in 1985 was a policy to guide the dollar lower; in reality, it was a rescue drama for the United States orchestrated by Japan, which had become an economic powerhouse. However, the dollar-weakening policy led to the formation and subsequent collapse of Japan’s bubble economy, after which Japan entered the “Lost 30 Years.” The yen exchange rate fell to ¥161 per dollar in 2024.
These 40 years covered in the book overlap with my own working life. As mentioned, I joined Sumitomo Corporation in 1986, one year after the Plaza Accord, and was assigned to the precious metals department. At that time, I knew nothing about gold and was desperate to learn the job. Reading this book made me recognize anew, “So there was such a political background.”
The author, Takeshi Kawanami, is a Nihon Keizai Shimbun reporter who covered the first Trump administration and the Federal Reserve as a Washington correspondent. His deep knowledge of the inner workings allowed him to write many insightful parts, and I found myself exclaiming “Oh, so that’s how it was” multiple times while reading. Regarding President Trump, the book covers his era as a real estate tycoon.
Regarding Japan’s current yen weakness, the book explains in detail: “Some say the cause of yen weakness is the Japan-U.S. interest rate differential, but the issue is not that simple. If the U.S. lowers rates and Japan’s long-term interest rates surge sharply, the Bank of Japan will likely restart government bond purchases and desperately try to suppress interest rates.”

The latter part of the book contains much timely content, and I think it’s a useful reference when considering yen risk hedging. I also found myself making many dog-ears (folding page corners) while reading it.