With the Japanese yen hovering around 157 against the dollar, the Japanese currency’s rapid depreciation has created problems for the country beyond costly imports, including by depressing wages in dollar terms and driving away foreign talent. At a presentation last month in Shanghai, Masato Sampei, the president of recruitment support company Asia to Japan, faced a pointed question from a student: Can you live on an annual income of 3 million yen ($19,100) in Tokyo? As Sampei explained the cost of living in Tokyo and a likely first-year salary at a Japanese company, students’ faces became crestfallen.
This is a sea change from just about 10 years ago, when talk of potential salaries at Japanese companies drew cheers. “The recent depreciation of the yen was a final blow,” Sampei said. “We cannot recruit talented students from China’s coastal areas, Taiwan and South Korea.” Japan’s wages have traditionally been low compared with other developed countries. Japan’s average wage in U.S. dollars ranks 25th out of 38 countries, according to the latest data from the Organisation for Economic Co-operation and Development. It fell behind countries like Slovenia and Lithuania when wages slumped after the bubble economy burst. With the recent depreciation of the yen, wages are looking even worse for overseas students. Securing highly skilled workers and the technical intern trainees that support short-staffed companies is becoming increasingly difficult.
As Japan’s appeal as a place of employment opportunity wanes, young Japanese people naturally turn overseas. “As the yen continues to weaken, more people are trying to earn money overseas,” said a representative from the Japan Association for Working Holiday Makers. The most popular destination is Australia. According to its government, 14,398 Japanese people were issued working holiday visas in the year ended June 2023, the highest number since 2006, the earliest data available. The national minimum hourly wage in Australia is 23.23 Australian dollars ($15.27), and “many people save 1 million to 2 million yen a year by working at restaurants, apparel stores or farms,” a working holiday association representative said.
But studying abroad, the first step toward getting a career-track job overseas, remains a challenge for Japanese students. TOEFL iBT, an English proficiency test required for studying abroad in the U.S., costs $245. That’s close to 40,000 yen at current rates, about five times the 7,810 yen TOEIC English test, which is a popular measure of English ability for Japanese people. Living expenses and other costs are also rising. “Maybe I should have exchanged money earlier,” said Tokyo resident Mako Watanabe, who graduated from university in March and is now working part-time in preparation for going to a language school in South Korea in September. Her tuition and dormitory fees for one year will come to over 10 million won ($7,300). The won exchange rate is now 0.116 against the yen, with Japanese currency sliding 12% from a year ago. Watanabe’s annual expenses went up 150,000 yen to about 1.2 million yen as a result. “The number of university students studying abroad is on the decline,” said a representative from Ryugaku Journal, which supports Japanese students studying overseas.
Nikkei Asia
