Two men in maintenance uniforms stand before a bank of computer screens, transfixed by a jamboree of flickering lights. Flashing before them are the latest yen quotes against the US dollar.
Across town, a 20-something university student stares intently at the lead story in the morning newspaper: "Yen hits 7-month high versus dollar." Between sips of her coffee, she brings herself up to date on the currency's surprising rise in global markets and what it means for Japan's economy.
The yen's powerful advance is big news in Japan, and not just in major cities such as Tokyo, Osaka and Nagoya. There's a growing unease in rural Japan too over the yen's strength -- a huge problem for a nation that's depending on exports to pull its economy out of recession.
"We're very concerned about our export business," explains Terutoshi Mizuguchi, who heads research at Hokkaido's prefectural economic planning office. "The strong yen could hurt our businesses even further."
Even though Japan remains mired in an 11-year slump, the yen has surged against the dollar and euro over the past two weeks. The trend owes much to the Sept. 11 terrorist attacks on New York and Washington. Figuring that the formerly bulletproof dollar is now vulnerable, many investors are buying yen instead.
Considering that more than 40 percent of Hokkaido's exports go to the US, the dollar's decline versus the yen isn't being taken lightly. After decades of waiting for the national government to steer funds and economic stimulus packages their way, rural areas are increasingly taking matters into their own hands.
In Hokkaido's case, that's meant exporting more to the US, Europe and the rest of Asia.
Trouble is, the competitiveness of this island north of Tokyo is being hurt by the yen's exchange rate. The same is true of the area's tourism. If a firmer yen prompts fewer Chinese, Taiwanese and Westerners to visit Hokkaido's hot springs and ski resorts, unemployment could soar in the months ahead.
"It certainly makes our situation much, much harder," says Hideaki Shimura, deputy secretary general at the Hokkaido Economic Federation.
Tokyo is losing enthusiasm for building its way out of recession with highways, bridges, tunnels and amusement parks.
For all the concrete Japan has poured into public works projects over the last decade the economy has benefited little. Hence Prime Minister Junichiro Koizumi's determination to spend taxpayers' money on more productive investments such as technology and education.
Koizumi's push is decidedly bad news for Hokkaido, which has lived almost solely from highway project to bridge project for 11 years now. That's why officials here are focusing their attention away from construction and toward exports. It's Hokkaido's vast potato, corn and mountain vegetable farms that economic planners are looking to now. The same is true of the engine parts, iron, steel, paper, ships and electronics the island sends to the US, Spain, China, Panama, South Korea and Taiwan.
"The yen's strength couldn't come at a worse time for us," says Mizuguchi.
The same is true on the national level. Japan is again sliding into recession at a time when policy makers have few options to revive growth. Interest rates already are at zero percent, and fiscal measures are limited by a government debt that's equal to 130 percent of gross domestic product and rising. That's why Tokyo is pinning its hopes to a softer yen.
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