Pressure from Japanese business world on government for a stronger yen is increasing

Two major business lobbies in Japan are emphasizing that the depreciation of the currency is creating serious economic pressure, particularly on small and medium-sized enterprises and households. Group leaders are demanding that the government and the Bank of Japan take steps to strengthen the national currency.

Keidanren Chairman Yoshinobu Tsutsui, pointing to the importance of a long-term approach in discussions regarding the weak yen, stated, "While a weak yen is generally seen as advantageous for exporters, a more robust currency should be preferred for the future of the national economy."

In 2025, the Japanese yen became one of the few currencies that failed to benefit from the decline in the US dollar. Despite the Bank of Japan raising interest rates twice throughout the year, there has been no major change in the yen's depreciation.

At the end of last year, the Japanese yen closed at the 157 level against the dollar. This situation has led to expectations that the Tokyo government might intervene in the currency market. Japanese authorities last intervened in the market to support the currency in July 2024, making purchases from the 161.96 level, which was a 38-year low.

Japan Chamber of Commerce and Industry Chairman Ken Kobayashi stated that small and medium-sized enterprises are facing rapidly rising raw material costs due to currency fluctuations and the weak yen. Kobayashi said, "The sense of desperation among small business owners who import materials from abroad must be eliminated."

Experts warn that the inflationary pressure caused by the weakening of the yen could slow down the recovery speed of the Japanese economy. Economists also state that tightening monetary policy in the coming period could be important for ensuring stability in the yen.