Yen to USD exchange rate triggers corporate crisis in Japan: leaders call for immediate action

The yen-to-dollar exchange rate volatility is causing an unprecedented crisis for the Japanese business sector. Ken Kobayashi, President of the Japan Chamber of Commerce and Industry, has recently demanded that the government implement stronger measures to stabilize the currency and protect more than 1.2 million small businesses affiliated with the organization.

Why a weak yen severely harms small businesses

The depreciated yen is critically affecting wage increase plans and the financial viability of local companies. According to data collected by Jin10, Kobayashi warned in recent statements that the current yen level poses a significant obstacle to the national economic recovery. Small businesses, which rely heavily on imports and have narrow profit margins, are the most vulnerable to these extreme currency fluctuations.

The ideal expectation: 130 yen per dollar according to business data

A survey conducted among members of the trade chamber revealed that an exchange rate of around 130 yen per dollar would be more sustainable for the economy. This level would allow small businesses to better plan their operations and remain competitive in the global market. Currently, fluctuations have ranged between 159 and 152 yen per dollar, representing a dangerous volatility for business stability.

Market speculation as the main factor of imbalance

Kobayashi identified that speculative movements are largely responsible for the current fluctuations in the exchange rate. This factor highlights the need for more decisive intervention by monetary authorities to counteract pressures from the international financial markets.

Policy tools: intervention, regulation, and verbal signals

The business leader demands that the government implement a comprehensive package of measures to manage the yen-to-dollar exchange rate. These tools include direct intervention in currency markets, stricter regulation of interest rates, and coordinated verbal warnings with international financial institutions. Although he recognizes the government’s recent efforts, Kobayashi argues that these actions are insufficient given the magnitude of the problem.

Stabilizing the exchange rate has become an urgent issue not only for the business sector but for the entire Japanese economy seeking to maintain its global competitive position.