Japanese Business Leaders Issue Call for Yen Stabilization and Wage Increase Protection

Japan’s largest business organization has issued a stern warning to the government to take more decisive action in addressing the currency exchange crisis. Ken Kobayashi, Chairman of the Japan Chamber of Commerce and Industry (JCCI), in a recent interview emphasized that the yen continues to weaken, creating serious impacts on the local business ecosystem, especially small and medium-sized enterprises that represent more than 1.2 million companies across Japan.

Japan’s Currency Situation Pressures Small Businesses and Plans for Employee Welfare

The weakening of the yen is not just a technical issue in the financial markets but an economic challenge that directly affects the operations of thousands of small-scale businesses. Uncontrolled exchange rate fluctuations create uncertainty in planning production costs, purchasing imported raw materials, and setting selling prices. This situation directly disrupts the implementation of wage increase programs planned by many companies, as profit margins are continually eroded by declining international price competitiveness.

JCCI Analyzes Market Speculation Roots and Kobayashi’s Position on the Ideal Exchange Rate

According to business survey data collected by JCCI, the ideal exchange rate to support growth in the small business sector is around 130 yen per US dollar. This standard is based on in-depth analysis of operational needs and global competitiveness of the organization’s thousands of members. Kobayashi firmly identifies that recent exchange rate fluctuations are largely triggered by market speculators exploiting macroeconomic instability. He views that such speculation requires a firm response from financial authorities, not just passive observation of market movements.

Complete Yen Policy Package: From Intervention to Verbal Warnings

Kobayashi not only voices concerns but also proposes comprehensive solutions involving a series of foreign exchange policy tools. These recommendations include direct intervention in the forex market to prevent extreme volatility, a thorough review of interest rate mechanisms affecting yen demand, and firm verbal warnings to market players to reduce speculative activities. Each component of this policy package is designed to create sustainable stability, not just address the immediate symptoms of currency weakening.

Government Not Enough: Kobayashi’s Evaluation of Authorities’ Response

Although Kobayashi appreciates the recent efforts made by the government to address the yen’s decline, he views these measures as still far from sufficient to handle the urgency of the situation. In his statement, he emphasizes that this issue is not merely about technical changes from 159 yen to 152 yen per dollar but about creating a stable and predictable economic environment for millions of small entrepreneurs. The current government response is seen as only scratching the surface of a much deeper challenge, requiring stronger and more comprehensive commitments to manage yen volatility and ensure long-term business growth sustainability.