Vietnam remains Japan’s biggest source of foreign labour, with 176,865 Vietnamese technical interns and 176,915 specified‑skilled workers recorded at the end of June 2025 – the highest figures for any nationality. Understanding why this pipeline is shrinking is crucial for both countries’ economies.

Japan took about 28,500 Vietnamese workers in the first half of 2025, according to Vietnam’s Ministry of Home Affairs, but that figure is down from 35,240 a year earlier. The decline signals a weakening of the traditional labour link between the two nations.

The recruiting firm that supplies workers to Japan reports that its pool of candidates has contracted by roughly 60%. Where seven or eight applicants once competed for each vacancy, the average is now only about two, forcing the company to relax its selection standards.

Pham Van Trong, the firm’s human‑resources manager, says the main driver is the weaker yen. The exchange rate fell from around VND200‑220 per yen to VND160‑170, meaning a worker’s savings after conversion are now VND400,000‑600,000 ($15‑23) less for every 10,000 yen earned.

At the same time, unskilled construction workers in Vietnam can now earn about VND20 million ($770) a month, making domestic jobs increasingly attractive. Combined with the fact that preparing for a Japanese placement takes about seven months – longer than for other Asian markets – many potential migrants are reconsidering the move.