Japan business lobby chiefs urge government to tackle weak yen

[TOKYO] Two major Japanese business lobby groups called on the government to address the yen’s weakness, which is inflating import costs and weighing on households and businesses, their chiefs told domestic media in separate interviews.

Yoshinobu Tsutsui, head of Japan’s biggest business lobby Keidanren, said in a group interview with multiple domestic media that the weak yen tends to be highlighted for its benefits, such as boosting profits for exporters.

But from the perspective of national strength, “it would be better in the long run to adjust towards a stronger yen”, he said, the media reports indicated.

The yen was one of the few currencies that failed to capitalise on the weak US dollar in 2025, despite two rate hikes by the Bank of Japan (BOJ) during the year.

The yen’s recent declines and subsequent inflationary pressures helped the BOJ convince dovish Prime Minister Sanae Takaichi’s administration of the need for the rate increase last month, but uncertainty over the pace of further rate hikes has capped the yen’s recovery.

The yen finished the year around 157 per US dollar, remaining relatively close to levels that prompted statements from officials in Tokyo about supporting the currency and increased market expectations of a possible intervention.

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Japan last stepped into markets to defend its currency in July 2024, buying yen after the currency hit a 38-year low of 161.96.

In a separate interview with domestic media, Ken Kobayashi, chairman of the Japan Chamber of Commerce and Industry, noted that the cost of procuring raw materials for small and medium-sized enterprises is increasing due to the weak yen.

As the weak yen has been a major factor behind inflation, the government and the BOJ “need to eliminate the sense of helplessness among small business owners that import materials from overseas”, he said. REUTERS