Is Japan losing allure among foreign workers amid yen’s slump?

Hiring firms said exchange rates partly to blame for decline in applicants after Tokyo’s ultra-loose monetary policy sent the yen to its lowest levels in decades

Worker shortages could make things worse for an economy beset with slow growth, but experts noted Japan is still a magnet for those with few job prospects in their home country

4-MIN READ4-MIN

A Vietnamese worker picks tomatoes at a farm in Asahi, Japan’s Chiba prefecture. File photo: Bloomberg

Published: 12:42pm, 10 Nov 2022

The yen’s recent slump has taken the sheen off Japan as a destination for foreign workers, a worrying sign for an ageing economy in desperate need of more people to keep its factories, farms and care homes running.

Japan’s government, which historically maintained low rates of immigration, has gradually opened the door to overseas workers in recent years to make up for the dwindling population. As a result, the number of workers from overseas tripled in just over a decade to around 1.7 million by 2019, with Vietnam becoming the largest source of foreign workers in jobs from agriculture and manufacturing to IT.

But the number of arrivals has flattened since the pandemic, and it’s unclear if the pace will pick up even with the borders now open. The yen hit a three-decade low against the US dollar last month, also shrinking in value against a range of Asian currencies including the Vietnamese dong.

“My friends who used to study or work in Japan don’t think it’s worth going, as the salary is now one-fourth lower than what they could earn before,” said Vietnamese software engineer Tran Trong Dai. The 29-year-old is sticking with a plan to move to Japan next year, but now expects to save less money than he’d originally anticipated.

Pham Duc Manh, head of recruitment and human resources at IT services provider FPT Japan, said the number of Vietnamese candidates for posts in Japan was poised to fall by about 40 per cent in the second half of the year, with exchange rates partly to blame.