Yen Weakness Continues to Threaten Japanese Small Businesses, JCCI Urges Government Response

The weakening Japanese yen has become a serious issue for Japan’s economy. The question now is simple: what are the weaknesses of the government’s strategy in addressing this currency crisis? Ken Kobayashi, Chairman of the Japan Chamber of Commerce and Industry (JCCI), has loudly criticized the government’s response to exchange rate fluctuations, warning that the impact is already being felt directly in the business sector.

What Are the Weaknesses of the Current Policy System?

According to Jin10, JCCI has conducted extensive business surveys revealing in-depth conditions about the yen’s weakness and its effects. An organization representing more than 1.2 million small businesses nationwide found that the ideal exchange rate should be around 130 yen per US dollar. However, recent fluctuations have far exceeded reasonable limits.

Kobayashi pointed out that this issue is not just a technical market problem. Market speculation has become the main trigger behind the astonishing exchange rate fluctuations, with movements from 159 to 152 showing extreme volatility. He believes that the weakness in government response lies in a lack of coordination and consistency in addressing it.

Real Impact on Small Businesses and Wage Plans

The impact of yen weakness is not limited to economic statistics. Japanese small businesses are facing real pressure on their competitiveness in the global market. More specifically, the government’s announced wage increase plans are threatened due to rising operational costs caused by currency depreciation. Imports are becoming more expensive, while export profits are insufficient to offset losses.

Kobayashi emphasized that although the government has tried to do something to address this situation, the measures taken still feel insufficient. This is a fundamental weakness in the government’s approach—being too conservative and lacking the courage to make bold decisions.

Comprehensive Solutions Expected from the Government

JCCI demands that the government implement a holistic approach that includes a more comprehensive set of foreign exchange tools. This is not just about verbal warnings or occasional interest rate checks, but active intervention in the currency market coordinated effectively.

Kobayashi expects the government to use a combination of comprehensive strategies: direct intervention in the forex market, strategic interest rate policy adjustments, and firm communication to market speculators. Without this multi-dimensional approach, the yen’s weakness will continue to be a burden for millions of small business actors in Japan.