As the weak yen persists, Japan appears to be losing appeal in its job market, with foreign workers less inclined to stay long term. Analysts said foreign workers tend to prefer Korea over Japan as a desired destination for employment.
According to Nikkei Asia on the 8th (local time), a survey by Japanese foreign employment support company Mynavi Global of 1,732 foreigners living in Japan in January–February this year found that among respondents willing to work in Japan, 61.6% said they wanted to stay in Japan for "five years or more." That was down 14.7 percentage points from last year. By nationality, the drop was largest among workers from Vietnam at 18.4 percentage points, followed by those from Indonesia at 10.9 percentage points.
Mynavi Global cited rising wages in Vietnam and the weak yen as key reasons. Recently, the yen fell to the low ¥162-per-dollar range, the weakest in about 39 years and 6 months. In Tokyo's foreign exchange market that day, the yen stood at ¥162.57–¥162.58 per $1 as of 8:30 a.m., down ¥0.36 from 5 p.m. the previous day.
However, while the yen has lost value, wages in major sending countries have risen, weakening the economic incentive to work in Japan. In Vietnam, the average monthly salary has increased about 1.4 times since 2019, reaching 8.4 million dong (about $320) last year.
Mynavi Global President Yuzuriha Motoki said, "Considering taxes and various expense, the income gap between Japan and Vietnam is gradually narrowing," and noted, "The weak yen has eroded Japan's relative wage competitiveness."
Nikkei Asia also said that the higher fee for renewing residency status in Japan and the burden of long-term stays required of foreign workers who came through the technical intern training program are factors pushing some workers to return home. In October last year, the Japanese government revised and implemented the requirements for obtaining the residency status "Business/Management" (management visa). The main change was raising the capital requirement sixfold, from ¥5 million to ¥30 million. In addition, for corporations, a clause mandating regular employee employment was added, and the Japanese-language proficiency requirement was also strengthened.
Yuzuriha said, "Policies to secure foreign labor stably are important, but macroeconomic conditions such as Japan's economic growth and wage levels are also key variables."
According to the Ministry of Health, Labor and Welfare, Japan had 2.57 million foreign workers last year, the most since related statistics began in 2007. Workers from Vietnam were the largest group at 605,906 (23.6%), followed by those from China at 16.8%.
However, the scale of needed labor is expected to grow. The Japan International Cooperation Agency (JICA) estimated that if Japan's economy grows 1.24% annually, 4.19 million foreign workers will be needed by 2030 and 6.88 million by 2040 to offset the decline in the working-age population.
But foreign workers appear to prefer other East Asian countries over Japan. Of the respondents, 83.7% said they were willing to work in a country other than Japan or their own, and the most preferred country was Korea (16.5%). The most common reason for choosing Korea was "the culture is attractive," at 31.4%, followed by "because higher income can be expected than in Japan," at 28.4%.
In particular, 30.9% of foreign workers with a Specified Skilled Worker (SSW) visa chose Korea as their top desired country for employment. Mynavi Global said Korea's Employment Permit System (EPS) is competitive in that it can offer relatively higher wages.
Yuzuriha said, "If wages in other countries keep rising, the weak yen continues, and countries strengthen their policies to attract overseas talent, Japan's appeal could decline further," adding, "Japan may drop in priority for foreign workers."