The Weakness of Yen Pushes Japanese Business Leaders to Demand More Aggressive Government Response

The weakening of the yen continues to be a serious concern for the Japanese business community. Ken Kobayashi, Chairman of the Japan Chamber of Commerce and Industry (JCCI), issued a stern warning that this currency weakness threatens the stability of small business economies and erodes efforts to increase worker wages. In an official statement on Friday, Kobayashi emphasized the need for more decisive and coordinated government action to address the exchange rate crisis.

Business Survey Reveals Real Impact of Exchange Rate Fluctuations

An organization representing over 1.2 million small businesses across Japan has shared the latest business survey results with the government. Data shows that the ideal exchange rate to support small industry operations is around 130 yen per US dollar. However, the current market reality is much worse. Fluctuations are not minor—shifts from 159 to 152 yen illustrate extreme volatility that creates uncertainty for business operators. JCCI warns that when exchange rates move rapidly and unpredictably, small businesses lose the ability to plan long-term investments and export strategies.

Market Speculation Is the Root Cause of Yen Weakness

According to Kobayashi’s analysis, most of the pressure on the yen stems from speculative activities in the global currency markets. Instead of reflecting Japan’s actual economic fundamentals, currency movements are driven by speculative capital plays and foreign investor predictions. This phenomenon creates artificial weakness that harms real businesses—especially small enterprises lacking sophisticated hedging mechanisms like large corporations. Kobayashi emphasizes that allowing speculation to control the yen’s value is a strategic mistake that requires immediate government intervention.

Government Urged to Activate a Full Intervention Package

The JCCI chairman calls for the government to implement a comprehensive and coordinated set of currency policy tools. This includes direct intervention in the forex market, reviewing interest rate policies to influence yen appreciation, and issuing strong verbal warnings to speculators. Kobayashi admits that the government’s recent efforts to counter the yen’s decline show seriousness, but he considers these measures still very limited compared to the scale of the problem. The current government response feels half-hearted and insufficient to resolve the structural weaknesses in the exchange rate that continue to harm the small business sector.

With increasing pressure from the business community, the question of how aggressively the Japanese government will address yen weakness becomes more urgent to answer in upcoming monetary and foreign exchange policies.