Bidding Strategy at Japanese Sword Auctions: How Domestic and International Sales Work

Overview of Japanese Sword Auctions

Japanese sword auctions broadly fall into two categories. One consists of specialized auctions for swords (such as the "Touken Auction" held by the NBTHK and bidding sessions organized by individual sword dealers), while the other involves major international art auction houses such as Bonhams, Christie's, and Sotheby's handling swords. In domestic specialized auctions, professionals from the sword world make up the majority of participants, making it easy to form market prices; in foreign major auctions, prices can be driven up by the participation of foreign collectors.

The Reality of Buyer's Premium

When purchasing a sword at an auction, you must be aware that a buyer's premium (auction fee) is added on top of the hammer price. Overlooking this can result in a substantially higher actual cost than budgeted.

Current rates by company (confirmed as of 2025):

Bonhams (UK and US): 28% up to £40,000, 27% from £40,001 to £800,000, 21% from £800,001 to £4,500,000, and 14.5% for £4,500,001 and above. Additionally, VAT (20% in the UK) is added to the buyer's premium.

Sotheby's: The buyer's premium rate was revised multiple times in 2024 (a flat 20% was introduced and then immediately withdrawn and revised again), and changes continue to occur. Always check the latest rates on the Sotheby's official website before bidding.

Christie's: Check the official website directly for specific revision dates and rates. Since all companies revise their rates frequently, develop the habit of checking the latest rates before bidding.

Domestic Japanese sword specialty auction sites often set fees of approximately 20% of the hammer price (for items over 500,000 yen), making them a relatively low-cost option.

Matters to Research Before Bidding

Catalog Information Verification: Confirm blade length, sori, mei, period, and the presence and type of certificate. Market prices vary significantly between NBTHK's Tokuju (special important sword) and Hozon (preservation sword).

Provenance Research: Swords from former daimyo families, former peerage, and noted collectors are highly valued in the market. If the catalog states "formerly owned by [old family name]," this serves as provenance documentation.

Comparison with Estimated Price (Estimate): The estimate listed in the catalog serves as a market price guide, but the actual hammer price may be higher or lower. It is important to research past hammer prices of similar pieces.

Checkpoints During Preview

Make full use of the opportunity to examine the piece in hand. Verify the sharpness of the hamon, the skin of the jigane, the rust color of the nakago, the tsuka, and the condition of the saya in person. Do not overlook "shiroke" (lack of sharpness in the hamon) and "kizu" (damage) that are difficult to discern in photographs.

Key Factors Affecting Hammer Price

1. Certificate Rank: Special important > Important > Special preservation > Preservation (in descending order of market value)
2. Sword Smith Reputation: Concentrated demand for specific smiths such as Masamune, Osafune Nagamitsu, and Kunitsugu
3. Completeness of Accessories: Whether or not gold fittings, koshirae, and sword boxes are complete
4. Condition: Presence or absence of re-tempering, wear from polishing, damage, or blade chips
5. Provenance: Whether it is from a noted former collection or not

Procedures After Winning a Bid

After winning a bid, notification of change of ownership must be submitted to the prefectural board of education noted in the registration certificate within 20 days, as required by Article 17 of the Law on the Control of Firearms, Swords, and Similar Articles. When importing a sword purchased at a foreign auction, separate procedures in the exporting country (according to that country's laws) and customs clearance and new registration procedures in Japan are required. For online bidding, it is essential to calculate in advance the "effective acquisition cost," which is the sum of exchange rate risk and fees.

Basic Principles of Bidding Strategy

Organize practical principles for avoiding disadvantageous bids at auctions.

Predetermining Maximum Bid: Before bidding, clearly set an upper limit ("this is the maximum cost I will pay to win," including the buyer's premium in the effective cost), and do not allow the excitement of bidding to push you beyond that amount. In international auctions, bidding excitement is particularly likely to cloud judgment.

Use of Proxy Bidding: When unable to attend the venue, you may be able to use the "proxy bidding (absentee bidding)" system, where you entrust your maximum bid to the auction staff. Online bidding platforms are available, but since there is a risk of connection failure, consider telephone bidding for important bids.

Observation of Preceding Lots: When multiple lots are offered at the same auction, observe the price ranges at which swords with similar provenance and rank are sold in earlier lots. This allows you to set a realistic bidding price for your target lot.

At TOUKENZA, you can also purchase swords and make inquiries through our online catalog separate from auctions. We recommend reviewing price, condition, and registration certificate information before making your decision.