The Yen-to-Dollar Volatility Sparks Alarm in the Japanese Business Sector

The Japanese foreign exchange market is under pressure following the sustained depreciation of the yen, whose weakness against the US dollar has begun to threaten the viability of thousands of small businesses across the country. This situation has prompted leading business representatives to call for more decisive government action to curb volatility in yen-to-dollar conversions.

Ken Kobayashi and the JCCI Warn About the Impact of Currency Weakness

Ken Kobayashi, President of the Japan Chamber of Commerce and Industry (JCCI), has publicly expressed concern to authorities about the current exchange rate situation. The JCCI, which represents more than 1.2 million small and medium-sized enterprises, uses its influence to channel sector demands.

According to recent statements, Kobayashi emphasizes that the yen-to-dollar conversion rate has deviated significantly from healthy levels. Based on an internal survey of the business chamber, an exchange rate of approximately 130 yen per dollar would represent a more balanced and favorable level for the national business fabric.

How Yen Fluctuations Are Undermining Business Growth Plans

The ongoing depreciation of the yen disproportionately affects small businesses, which lack the financial hedging tools available to large corporations. These businesses face two simultaneous pressures: rising costs of imported raw materials and erosion of margins on export sales.

Kobayashi warns that this situation is undermining the ambitious wage increase plans promoted by the government as a strategy to revive domestic consumption. Without stability in yen-to-dollar conversions, companies are forced to freeze or postpone salary increases that the private sector had promised.

Speculation as a Key Factor in Currency Volatility

The JCCI president points out that recent fluctuations in the exchange rate are mainly due to speculative movements in international financial markets, rather than fundamental changes in the Japanese economy. This volatility is particularly evident in the fluctuations recorded in the range of 159 to 152 yen per dollar, variations that create business uncertainty.

A Comprehensive Set of Measures to Stabilize the Yen-Dollar Relationship

Kobayashi proposes that the government deploy a broader arsenal of tools to regulate the yen-to-dollar exchange rate. Among these measures, he suggests: direct intervention in currency markets, implementation of regulatory controls on exchange rates, and public warnings coordinated with other governments to discourage excessive speculation.

Although he recognizes the recent efforts made by Japanese monetary and fiscal authorities, he considers these actions insufficient given the magnitude of current challenges. The persistent weakness of the yen, in his view, requires a coordinated and multidimensional response that goes beyond sporadic interventions.

Kobayashi’s stance reflects growing concern in the business sector about how volatility in yen-to-dollar conversions will continue to impact international competitiveness and the well-being of millions of small entrepreneurs in the coming quarters.