Japan Should Target 120 Range for Yen, Business Leader Says.

According to Ken Kobayashi, chairman of the Japan Chamber of Commerce and Industry, Japan's government and central bank should target an exchange rate of 120-130 yen per dollar. He argues that the yen is currently too weak for struggling small businesses, and a stronger yen would offer them greater operational flexibility. Kobayashi also suggests that the government should not hesitate to manipulate its currency as needed. The recent depreciation of the yen is primarily due to the difference between US and Japanese interest rates, and Kobayashi believes that a Bank of Japan rate hike could help narrow this gap. He emphasizes the importance of boosting wages among small and medium-sized enterprises and suggests that the government's efforts to incentivize companies to pass on higher costs along the supply chain should be further built upon. [Extracted from the article]