Japan’s Business Leaders Call for Action as Weak Yen Raises Costs

Post by : Saif Nasser

Japan’s leading business groups have urged the government to take stronger steps to deal with the weak yen, warning that the falling currency is pushing up import costs and adding pressure on families and companies across the country.

The calls came from the heads of two major business lobbies, who spoke to Japanese media in separate interviews at the start of the new year. Their comments reflect growing concern that while a weak yen may help exporters, it is causing wider economic pain.

Yoshinobu Tsutsui, head of Keidanren, Japan’s largest business lobby, said the weak yen is often praised for helping exporters earn higher profits. However, he stressed that this view is incomplete. From a long-term national perspective, he said, Japan would be better off moving toward a stronger and more stable yen.

The yen struggled throughout 2025 and was one of the few major currencies that failed to benefit even when the U.S. dollar weakened. This happened despite the Bank of Japan raising interest rates twice during the year. Many analysts say uncertainty about how fast rates will rise further has limited the yen’s recovery.

The weak currency has also added to inflation by making imported goods more expensive. This inflation pressure helped the central bank convince the government last month that another rate hike was needed. Still, doubts remain over how far and how fast interest rates will rise in 2026.

By the end of 2025, the yen was trading around 157 per U.S. dollar, close to levels that previously triggered warnings from Japanese officials. Japan last stepped into currency markets in July 2024, when it bought yen after the currency fell to its weakest level in nearly four decades.

In another interview, Ken Kobayashi, chairman of the Japan Chamber of Commerce and Industry, highlighted the struggles of small and medium-sized businesses. He said the weak yen has sharply increased the cost of raw materials imported from overseas, squeezing profit margins for smaller firms.

Kobayashi added that the government and the central bank need to restore confidence among business owners who feel powerless against rising costs. Without action, he warned, the weak yen could continue to harm everyday life and slow economic growth.

Together, these comments show rising pressure on Japanese policymakers to find a better balance. While exporters may benefit in the short term, business leaders say a stable and stronger yen is key to protecting households, supporting small businesses, and strengthening Japan’s economy in the long run.