The current global recession is impacting on gold jewelry sales in Japan. According to the Japan Department Stores Association, department store sales in Japan plunged by 11.3% in April, down for the consecutive 14th month. Sales of jewelry, artwork and precious metals declined by 20.5%.

According to Commodity Online, the continued year-over-year decline in consumer purchases is slowing with the rate of decline narrowed by 1.8% in April as compared to March.

The Japanese government initiated the handing out of cash benefits in April, with the aim of increasing consumer spending. According to the Japan Department Stores Association, the effects of the cash handouts will probably felt by department stores in major cities only in May because it is taking large cities longer to hand out the cash to residents.

Gold futures is doing brisk business in Japan. Tokyo Commodity Exchange Inc (TOCOM) noted that the open interest in the gold mini contract, launched in July 2007, hit a record high last month, exceeding that of the standard gold contract.

About 20% of those opting to invest in gold are investing in TOCOM's gold mini contract and about 10% are actively trading.