A government survey has found that the strong yen could trigger a further shift of Japanese manufacturing to overseas locations.
The economy ministry surveyed about 200 manufacturing firms nationwide, following the yen's recent climb to a 15-year high.
About 65 percent of major manufacturers said their earnings would decline because of the yen's current value. Forty percent replied that they would shift their factories and research centers overseas, if the yen's strength continues.
Seventy percent of small businesses predicted lower earnings due to competition from cheaper products made by foreign rivals.