Japanese currency devaluation crisis intensifies, small businesses face survival dilemma

Japanese small businesses are facing severe challenges due to the continuous depreciation of the yen. As the main carriers of manufacturing and service industries, these small and medium-sized enterprises (SMEs) are forced to bear higher import costs due to yen devaluation, with profit margins being constantly squeezed. At the same time, the originally planned employee salary increase policies are also at risk of being delayed or scaled back due to exchange rate fluctuations, which undoubtedly impacts corporate human resources strategies.

Yen Weakness Causes Chain Reactions in Business Operations

Kobayashi Ken, President of the Japan Chamber of Commerce and Industry, recently publicly urged the government to address this issue. He pointed out that the current yen exchange rate is excessively depreciated and has become a significant factor constraining the development of small businesses. Companies are facing multiple pressures such as rising raw material costs and declining export competitiveness, which hit SMEs relying on imports and exports especially hard. Kobayashi Ken emphasized that the imbalance in Japan’s monetary policy is no longer just a currency issue but a strategic problem affecting the country’s economic foundation.

Policy Recommendations and Ideal Exchange Rate Goals

According to a survey conducted by the Japan Chamber of Commerce and Industry, the industry generally believes that an exchange rate of around 130 yen per US dollar is a more ideal operating environment. Kobayashi Ken stated that the government must mobilize the full range of foreign exchange policy tools, including direct market interventions, exchange rate monitoring and regulation, and verbal warnings, to respond effectively. He acknowledged the government’s recent policy efforts but also pointed out that these measures are not yet strong enough and need to be scaled up.

Kobayashi Ken’s call reflects the collective concern of Japanese small businesses. When the Japanese currency faces long-term depreciation pressure, government policy responses must be more proactive. Only in this way can a stable operating environment be provided for SMEs and promote healthy overall economic development.