Faced with a dwindling population and severe labor shortage, Japan aims to attract more foreign workers, but a rapidly depreciating yen and lack of rights stand in the way.

"Japan needs to compete for foreign workers against other developed Asian nations – the weakening yen won't make the country any more attractive" said Cesar V. Santoyo, a former priest who worked with migrants in Hong Kong before founding SOLS, a non-profit organization that retrains Filipino women living in Japan as English teaching assistants.

The yen has been in a downward spiral since Prime Minister Shinzo Abe introduced a series of fiscal and monetary stimulus measures to spur the economy in 2013. The U.S. dollar is near a seven-year high against the yen, up around 40 percent since Abe took office in December 2012.

Read more: New repair manual needed for Japan's broken economy



A weaker yen makes yen-based wages less attractive to workers that plan to make remittances to family members back home.

Only while we need them

Two large publicly-financed construction projects – the ongoing reconstruction of the northeast region hit by the 2011 earthquake and the construction of venues for the 2020 Tokyo Olympics – have brought the issue into focus. Japan's construction industry faces a shortfall of 230,000 workers in 2015, government statistics show.

Japan's ageing population and low birth rates further underscore the need for labor. The population shrank for the third straight year in 2013, according to the Internal Affairs Ministry, and is projected to shrink by a third by 2060, increasing the need to import caretakers for children and the elderly, especially if housewives – traditionally caretakers in Japan – are expected to join the workforce.

Read more: Betting on social change in Japan



But voters find immigration unpalatable. Just 12 percent of respondents in the most recent government survey feel there should be more foreign workers.

As a result, Abe's ruling party insists there is "no immigration policy," just a plan to "expand the utilization of foreign talent," in its manifesto for this Sunday's national elections.