Prime Minister NODA's BLOG

On Respect for the Aged Day yesterday (the 19th), I paid a visit to two small and medium enterprises (SMEs) in Tokyo's Ota Ward as well as to the Yokohama factory of an automobile manufacturer.  At each of these places we held an exchange of views centered on the impact of the recent appreciation of the yen.

When you get a sense of a manufacturing location through your own eyes and ears and listen unfiltered to what executives and workers have to say, you will most certainly find out something new that can't be perceived through the figures of economic indicators alone.

I found the master craftsmanship of professionals which compare favorably with precision instruments, competing on processing that achieves accuracy at the single-micron scale.  A long-established plating company is taking on the new growing market of smart grids with a vigorous attitude.

The SMEs of Ota Ward with their dreams and passion and pride, as depicted in Jun Ikeido's recent award-winning novel Shitamachi (old down town) Rocket, are clearly not only in the pages of a novel but a strength of Japan existing here and now.  I felt this very keenly along with the somehow familiar smell of oil of these factories.

Yet at the same time, the recent appreciation of the yen has brought about a sense of crisis more than any other aspects in years past.

"If our business partners head overseas, we won't be able to maintain production in Japan either."
"We can't get a clear view of the future and cash flow is extremely tight."
"We're in a process of trial and error so as to hand specialized skills down to the younger generation."

I heard such statements one after the other during the opportunities to speak with the executives.

Even companies with superior technologies face this kind of situation.  We cannot even grasp the predicament for the many companies for which it is quite difficult to offer some sort of unique product or service.  We must not allow technologies and human resources that should remain in Japan to flow out to overseas on account of excessive appreciation of the yen.

In order to avoid the hollowing out of industry, within the forthcoming third supplementary budget I intend to address tenaciously a strengthening of support for cash flow for SMEs and other such measures.

Yesterday, I also had the opportunity to visit a factory handling the technological development and production of state-of-the-art electric vehicles.  It is a very welcome state of affairs that companies are making forward-looking investments to take on international competition while committing to hiring employees domestically, with financial incentives from the government to support business locations serving as pump-priming measures.

Here again, what I found to be the most marvelous was the power of "the workplace," as well as the executives, who know very well that that is their strength.

The thing that left the greatest impression on me was the moment at which a veteran assistant manager at one of these factories came to make an appeal.  I felt that he was harboring very intense feelings, judging from his very powerful eye contact.

"What brought a resurgence in post-war Japan after we were defeated in the war and lost everything was the fact that there were workers at our factories with pride and dreams.  Utilizing the "spirit of manufacturing" that had been handed down from older workers, we intend to keep up our endeavors to prevail over the competition in terms of cost and quality."

The technological capabilities owned by such factories and, indeed, their passion are truly wonderful things.  We must not allow them to be diminished.  The national government will consider responses that utilize Japan's strengths in a strategic manner.

Today we will decide criteria for budget requests for the next fiscal year and from now I will be departing for New York.  I am currently in the midst of polishing the address I will deliver at the United Nations General Assembly.

Yoshihiko Noda
Prime Minister of Japan
September 20, 2011

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