Japanese executives from top firms, including Mitsubishi Electric and Fast Retailing, warned on August 10 about the risks a weak yen poses to Japan’s largely import-dependent economy [1, 2, 3, 4]. They highlighted that while exporters may benefit from a weaker yen, costs from importing raw materials rise sharply at certain exchange rates, hurting domestic demand and overall corporate profits [1, 2, 3].

The yen hit a 40-year low near 164 per US dollar in July 2026, triggering a rare joint intervention by Japan and the US on July 29 that temporarily lifted the yen by around 5% [1, 5, 6, 2, 3, 4]. However, by early August, the effect had faded and the yen weakened again to around 159-160 per dollar, close to levels seen before the intervention [1, 5, 6, 4].

Executives voiced concerns over persistent volatility. Kenichiro Fujimoto, CFO of Mitsubishi Electric, said, "Problems affecting the entire Japanese economy affect us too. A weak yen does not necessarily mean all is well." Norihiko Ishiguro, chairman of the Japan External Trade Organization (JETRO), pointed out that "although a weaker yen has real advantages for exports, Japanese companies import almost all their raw materials. At a certain exchange rate costs actually increase, so we can't say exporters always win from a weak yen" [1].

Takeshi Okazaki, CFO of Fast Retailing, the parent company of Uniqlo, noted, "If things change too rapidly, it's quite difficult to keep up, and that could potentially have a significant impact on our performance." Ryohin Keikaku president Satoshi Shimizu said his company is "seeking to cut costs by bolstering in-house production rather than relying solely on price increases to protect profit margins from the weakening yen" [1].

Masayuki Nakajima, a senior strategist at Mizuho Bank, cautioned that if the dollar "were to break decisively above the psychologically important 160 (yen) level, concerns about intervention could intensify further" [5]. This follows a reduction in speculative net short yen positions by $8.865 billion to $3.604 billion as of August 4, though traders may rebuild bearish bets if market conditions worsen [5, 6].

Meanwhile, Japan’s labor market showed softer private sector job gains than expected in August 2026, adding to concerns about economic momentum [1]. Japan’s current account surplus increased year-on-year over six months but posted a rare monthly deficit in June due to rising energy import costs and dividend outflows, totaling 92.3 billion yen [4].

Executives from Mitsui & Co and Mitsubishi Corp voiced hopes for market calm. Mitsui CFO Makoto Tanaka said he “most want[s] the market to stabilize and volatility to come down.” Mitsubishi Corp CFO Yoshihiro Shimazu noted they will adjust their assumed exchange rate of 150 yen per US dollar "when needed" due to fierce fluctuations [2].

On August 11-12, Japan observes the Obon holiday, which reduces market liquidity and increases the risk of sharp currency moves [5, 6, 4]. Traders will watch closely if the yen weakens further, especially through the 160 level.

External factors include the Reserve Bank of Australia holding interest rates steady at 4.35% with a warning of further hikes, as the Australian dollar trades near an eight-week high around 0.705 US dollars [5, 6].

With the Obon holiday underway and volatility persisting, Japanese businesses and markets face heightened uncertainty as the yen struggles to regain stable footing after the July intervention.