Foreign Workers Send More Than ¥1 Trillion Home from Japan

¥1.0039 Trillion: Crossing a Line for the First Time

Japan’s balance-of-payments data, compiled by the Bank of Japan for the Ministry of Finance, recorded approximately ¥1.0039 trillion in outbound personal transfers during fiscal 2025. That was 11.5 percent more than a year earlier and more than double the roughly ¥470 billion of fiscal 2015. Converted mechanically at the July 15 reference rate of ¥162.09 to the dollar, the total is about $6.19 billion. The conversion is illustrative: transfers throughout the fiscal year occurred at many different exchange rates.

Vietnam received ¥288.7 billion, about 28.8 percent of the total. Indonesia followed with ¥89.8 billion and the Philippines with ¥67.1 billion, according to reports based on the country breakdown. Asian destinations dominate because of the national origins of workers in Japan, the share whose families remain abroad, residence status, earnings, length of stay and use of formal financial channels.

This Is Not a Perfect Count of “Foreign Workers’ Remittances”

The distinction is essential. The official balance-of-payments category is personal transfers: unrequited current transfers between resident and nonresident households. Workers supporting families abroad are central, but the category can also include living support between relatives or friends, personal gifts, donations and certain compensation payments. It is not confined to employment income or foreign nationals.

Nor does it capture every flow perfectly. The BOJ estimates the item from payment reports and surveys submitted by banks and registered funds-transfer providers. Cash carried home and informal settlement networks are difficult to observe. Some income of people working for short periods may appear under “compensation of employees,” depending on statistical residence.

Dividing ¥1.0039 trillion by 2,571,037 foreign workers gives about ¥390,000 per person per year. It must not be labeled an average remittance. The periods differ; many people remit nothing; Japanese senders and non-wage transfers are included. The calculation is useful only as a rough sense of scale.

How One Transfer Travels

A sender pays yen into a bank, funds-transfer company, app or agent. The provider verifies identity and performs anti-money-laundering checks, sends instructions through its network or overseas partner, and arranges payout in local currency to a bank account, cash counter or sometimes a mobile wallet. The same physical money does not fly abroad. Claims and obligations across several institutions are reconciled and settled.

“Zero fee” does not necessarily mean cheap; the price can be embedded in the exchange rate. The World Bank defines total cost as the sender’s fee plus the exchange-rate margin from a reference market rate. In the second quarter of 2024, the average cost of sending the equivalent of $200 from Japan was 7.89 percent, second-highest among G20 sending countries after South Africa. World Bank data for Japan-to-Vietnam in the third quarter of 2025 also showed some services near two percent, demonstrating the enormous difference among providers and payout methods.

What a Weak Yen Does to a Family

If a worker sends a fixed ¥50,000 each month and the yen falls against the recipient’s currency, the family receives less local money. If the worker promises a fixed amount in the home currency, more yen must be earned and sent. Rising food, rent, medical or school costs can compound the pressure.

An increase in the yen value of recorded transfers therefore does not prove that recipient purchasing power rose by the same proportion. The number of senders, wages, hours, frequency, exchange rates and fees move simultaneously. If yen weakness makes Japanese jobs less attractive than alternatives in Korea, Taiwan, Europe or the Gulf, it also affects Japan’s ability to recruit. Remittances are both an outcome of exchange markets and a signal of labor-market competitiveness.

1990 to 2027: Labor Expanded Without the Word “Immigration”

Postwar Japan long maintained a formal distinction: encourage professional and technical workers, remain cautious about admitting so-called unskilled labor. Aging and shortages nevertheless widened a series of separate doors. The 1990 immigration-law revision expanded residence routes for people of Japanese descent and their families, increasing employment by Brazilians and Peruvians, especially in manufacturing.

The Technical Intern Training Program began in 1993 under the stated purpose of transferring skills to developing countries. In practice, it supplied small manufacturers, farms, construction, food processing and other sectors. Employment status was clarified from the first training year in 2010, and a new law and the Organization for Technical Intern Training strengthened supervision in 2017. Criticism continued over job-change restrictions, low pay, disappearances and recruitment fees.

Japan created the Specified Skilled Worker status in 2019 for designated shortage sectors. Legislation enacted in 2024 will replace technical training with the Employment for Skill Development system, scheduled to begin in April 2027. Its stated goals are explicitly to develop and secure workers; it allows job transfers under conditions and creates a path toward Specified Skilled Worker status. The vocabulary has moved closer to reality—from “training” to labor-force development and retention.

Inside Japan’s 2.57 Million Foreign Workers

The labor ministry counted 2,571,037 foreign workers and 371,215 establishments employing them at the end of October 2025—records in both cases. The workforce had expanded roughly 2.8 times from about 910,000 a decade earlier. Vietnam was the largest nationality at 605,906, followed by China at 431,949 and the Philippines at 260,869. Professional and technical statuses were the largest category at 865,588; status-based residence accounted for 645,590, technical internship for 499,394 and activities outside a primary status, mainly student work, for 449,324.

Worker population and remittance ranking do not match automatically. Chinese nationals are the second-largest workforce but China was not among the top two destinations. Income, whether family lives in Japan, settlement plans, student share and whether movement to an account abroad qualifies as a household transfer all differ. No nationality is a single economic type.

For a Family, Remittance Is Insurance

A remittance is not government aid. It is a worker’s decision about private earned income. Recipient households use transfers for food, housing, health care, education, debt repayment, farm equipment, small businesses and repairs after disasters. Regular small transfers smooth consumption and act as private insurance against illness, job loss or a failed harvest.

Globally, remittances to low- and middle-income countries have become more stable and larger than official development assistance and, in recent years, foreign direct investment. Because they arise from family relationships, they may continue during a downturn when commercial capital retreats. Dependence has costs: a sender’s job loss, exchange-rate shock or visa change can destabilize the entire household. Separation and care burdens do not appear in the financial statistics.

Is the Money a “Drain” on Japan?

In the balance of payments, outbound personal transfers are debits in secondary income and reduce the current-account balance. Calling them a national loss is misleading. They are not taxes leaving Japan or an aid appropriation. They are private income paid for labor. Before remitting, foreign workers pay Japanese rent, food, transportation, taxes and social-insurance contributions, while producing goods and services.

If every yen were spent domestically, short-run demand might be larger. Yet the ability to remit is part of why many people take Japanese jobs, supplying sectors that otherwise cannot hire enough workers. A serious economic assessment must combine production, taxes, insurance contributions, business continuity, domestic spending, education and public service costs—not isolate the transfer.

¥1 trillion is large but one line in Japan’s much larger external accounts. Japan also earns immense dividends and interest on overseas assets, creating a primary-income surplus. Household support must not be confused with a trade deficit or capital flight.

The Recruitment Debt Before the Remittance

A large remittance total does not prove workers are prosperous. An International Labour Organization project on the Vietnam–Japan corridor reports that Vietnamese migrant workers pay an average 192 million dong—about $8,000—to secure a first job in Japan. When migration begins with debt, early transfers may repay recruiters and lenders before supporting daily family life. Debt also makes it harder to leave an abusive employer.

Japan’s minimum wage, Labor Standards Act and workers’ compensation apply regardless of nationality. Language barriers, the link between visa and employer, restrictions on changing jobs and unequal information can still obstruct enforcement. Fair remittance policy begins before a transfer app: workers should not carry recruitment costs, equal-value work should receive fair pay, and contracts and payslips should be understandable.

Five Numbers to Compare Before Sending

Japan’s Financial Services Agency warns that remittance services outside banks or registered funds-transfer providers are illegal. As of June 30, 2026, the FSA listed 84 registered providers. A cheap informal channel can expose a family to loss, fraud and money-laundering networks.

The Questions After ¥1 Trillion

Good policy should not try to trap workers’ earnings inside Japan. It should reduce fees and hidden exchange spreads, expand access to regulated services and eliminate worker-paid recruitment costs. Pension lump-sum withdrawal and social-security agreements should be understandable. People who remain need credible routes for family unity, education, Japanese language, housing and job mobility. Settlement may increase domestic spending, but it does not erase transnational family obligations.

The data can improve too. Privacy-protected links among nationality, residence status, income bands, transfer channels and prices would help separate growth in workers from wages, exchange rates and family composition. A single aggregate cannot do that.

¥1.0039 trillion is evidence that Japan is already part of a cross-border network of labor and family life. Behind one transfer may be a care worker finishing a night shift, a factory rotation, a farm trainee, a child waiting for tuition or a parent buying medicine. The constructive response is not suspicion of the flow. It is to ensure that people can earn without debt or exploitation and use what they earn safely, transparently and at a fair price.