Japan's executives call for FX stability as weak yen intensify import-cost pressure

• The yen reached a 40-year low at nearly 164 to the dollar in July 2026, prompting joint Japan-U.S. intervention that lifted the currency by approximately 5%
• A JETRO survey found only 11% of firms preferred exchange rates above 150 yen to the dollar, with nearly a fifth preferring the 120-124 range, though executives doubt a return to those levels
• Import-dependent companies face mounting pressure from higher costs for energy, materials and food, threatening Japan's gradual emergence from decades of deflation even as some exporters like Mitsui & Co posted record quarterly earnings

Summary

Japanese executives are voicing concerns over currency volatility and yen weakness despite some companies benefiting from the exchange rate. The yen reached a 40-year low in July 2024 at nearly 164 per dollar, prompting coordinated Japan-U.S. intervention that strengthened the currency by approximately 5%.

Key Corporate Voices:

Senior executives from major Japanese firms are calling for stability. Mitsui & Co CFO Makoto Tanaka urged market stabilization despite the company posting record Q1 earnings boosted by the weak yen. Mitsubishi Corp CFO Yoshihiro Shimazu indicated the company would revise its 150 yen-per-dollar assumption as needed. Mitsubishi Electric CFO Kenichiro Fujimoto warned that "a weak yen does not necessarily mean all is well."

Economic Impact:

While exporters gain from currency depreciation, Japan's import-dependent economy faces significant pressure. Higher costs for energy, raw materials, and food are weighing on domestic demand and threatening the country's emergence from decades of deflation. JETRO Chairman Norihiko Ishiguro noted that Japanese companies import nearly all raw materials, meaning costs can actually increase at certain exchange rates.

Market Preferences:

A March JETRO survey revealed nearly 20% of companies prefer an exchange rate of 120-124 yen per dollar, with only 11% favoring rates above 150. However, executives suggest these levels may be unrealistic given Japan's fundamentals and trade balance challenges.

Bottom Line:

Currency swings are disrupting earnings forecasts and delaying investment decisions across Japanese corporations, highlighting a complex economic picture where even yen-benefiting exporters seek stability over further depreciation.