Japanese business leaders, even those poised to gain from a weaker currency, are now voicing support for a stronger yen. The head of Kawasaki Heavy Industries has indicated he would consider shifting manufacturing capacity back to Japan if the exchange rate reached 150 yen to the dollar. Meanwhile, the CEO of oil giant Inpex has called 100 yen per dollar a "fair" level for the economy. The yen saw gains on Wednesday, supported by a rally in Japanese equities and market bets that Prime Minister Takaichi's victory would steer policy toward greater fiscal discipline.

Executives from some of Japan's largest corporations, including firms that benefit from a soft yen, are increasingly advocating for currency strength. One leader stated that a stronger yen could prompt a relocation of production facilities to the domestic market. Speaking on the sidelines of the Gastech gas technology conference on Tuesday, Kawasaki Heavy Industries Chairman Yoshinori Kanehana described the yen's volatile swings as the company's "biggest headache," noting that it renders strategic planning impossible. Kanehana remarked that if the currency were to touch 150 yen per dollar, he would contemplate moving manufacturing operations from the United States back to Japan. According to the company's latest annual report, Kawasaki maintains 27 overseas production sites, including facilities in the US, alongside 17 bases within Japan.

Takayuki Ueda, President and CEO of major energy firm Inpex, is hoping for an even firmer yen. He stated that an exchange rate of 100 yen to the dollar would be a "suitable" level for the Japanese economy. This stance is particularly notable given that Inpex conducts nearly 90% of its operations overseas and transacts in US dollars. In theory, a weaker yen inflates the value of dollar-denominated profits when converted to the local currency. While Inpex's first-half revenue declined this year due to lower crude oil sales, the company's financial report noted that a 6.7% depreciation of the yen to 158.37 per dollar helped offset some of that fall. "However, from the perspective of the broader Japanese economy, the current exchange rate may be too weak," Ueda said on Monday at the Gastech conference in Bangkok.

Although the yen has rebounded quickly over the past two weeks, it remains historically weak. Data from Macrotrends shows the 10-year average exchange rate for the yen against the dollar is approximately 123, while the currency traded at 156.3 per dollar on Thursday. Takeshi Hashimoto, Chairman of Mitsui & Co., the world's largest oil tanker owner and operator, expressed a desire for stability in the currency market, stating that a range of 150 to 155 yen per dollar would put him at ease. Mitsui's revenue is largely dollar-denominated, which typically benefits from a softer yen. However, Hashimoto voiced concern, saying, "We worry that continued yen weakness could lead to turmoil in the financial markets."

The Bank of Japan's Tankan survey from July showed that Japanese companies expect an average exchange rate of 152.51 yen per dollar for the latter half of the fiscal year. Investors are currently pricing in a 25-basis-point rate hike by the central bank at the conclusion of its two-day policy meeting on Friday, which would bring the benchmark rate to 1.25%. Matthew Ryan, Head of Market Strategy at Ebury, noted in a Monday research report that the stakes are "very high" for the central bank's move. He anticipates a rate increase accompanied by a hawkish tone, which would essentially endorse a path of quarterly hikes going forward.