Japan Press Weekly

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2010 September 8 - 14 [ECONOMY]

Government must protect SMEs from effects felt by strong yen: Yoshii

At a House of Representatives Economy and Industry Committee meeting on September 8, Yoshii said that behind the strong yen is the fact that Japan’s major manufacturers have enormously improved their international competitiveness through forced reductions in unit prices of parts paid to their sub-contractors and through the use of cheap labor with the increase use of temporary workers.

Yoshii said, “SME owners want to obtain more orders. Without orders from parent companies, they can’t stay in business. If the government does nothing, the economic recession will be further deepened and SMEs, the foundation of Japan’s manufacturing industry, will disappear.”

As another factor in the strong yen, Yoshii cited the inflow of speculative money into the foreign exchange market. He demanded that the government establish effective regulations on speculation by such means as levying a tax on international transactions.

Minister of Economy, Trade and Industry Naoshima Masayuki in response said, “Taking the need for international discussion into consideration, the government will discuss the issue of regulations on speculative money.”

On the same day, JCP representative Sasaki Kensho at a House of Representatives Financial Affairs Committee meeting criticized the government and the Bank of Japan (BOJ) for failing to take appropriate measures to cope with the strong yen.

Sasaki pointed out that if the government continues to allow large corporations to cut unit prices of parts paid to their suppliers and to slash jobs, it will further decrease domestic spending.

He also said that the BOJ’s current monetary policy is ineffective, and that the government should take measures to revitalize the household economy in order to boost domestic demand.
- Akahata, September 9, 2010