"It is troublesome on the macroeconomic front, but not many individual companies here are complaining about the yen's weakness now," Hiroshi Okuda told Reuters in an interview.

He added that Toyota's business enjoyed a windfall because of the weak yen, which analysts say should make Japanese exports more competitive in overseas markets.

The dollar stood at around 145 yen on Thursday.

Toyota's car exports grew 5.5 per cent to 742,059 in the January to June period from the same period a year earlier.

Sales were buoyed by the yen's weakness and relatively healthy demand for Toyota cars overseas.

Last December, Toyota predicted its 1998 vehicle exports would fall by eight per cent to about 1.38 million units, but Okuda said the company now expects sales to grow on a year-on-year basis.

"I think we will see growth of between fiveand six per cent," Okuda said, referring to exports for this calendar year.

In the domestic market, Toyota last month cut its domestic vehicle production target for 1998 to 3.2 million units from its previous target of 3.44 million units.

Japan auto sales have been hit by slumping consumerspending, but Okuda said he hopes to see a recovery in demand later this year, helped by the introduction of new models.

"Looking at the passenger car market, we saw year-on-year growth in May through July. I think we will likely see some recovery in overall car demand helped by the planned launch of new models this autumn," he said.Asked whether he wants Japanese monetary authorities to adopt a reflationary policy to stimulate stagnant domestic demand, Okuda said, "It would be difficult. I hope to see natural inflation growth of around one to two percent. But creating inflation artificially would cause problems".

Okuda said he and other business leaders will back up prime minister Keizo Obuchi in pulling thenation's economy out of its current recession.

But he warned that the nation's jobless rate, which rose to a record high of 4.3 per cent in June, would take a long time before showing any improvement.

"The history of major nations such as Britain, United States and Japan show unemployment rates tend to move in 10-year cycles. It usually takes about 10 years for the increased rate to head lower," he said.Okuda said it would not be an easy task for Japanese corporations to cut or transfer personnel to different sectors or to newly developed industries.

Asked whether Japan's real interest rates are still high for companies to boost capital spending, Okuda said interest rates are not a major factor behind weak capital spending.

"Japanese firms' excess output capacity has largely resulted from current sluggish consumption. There is no link between interest rates and capital spending at the moment."

Okuda said Toyota would look into capital market conditionsbefore setting terms of its planned 20-yeardomestic straight bonds, but did not give any timing.

Underwriting sources have said the automaker plans to issueabout 50 billion yen worth of domestic straight bonds, but that the issue has been delayed due to worsened market conditions.

Last month, Toyota issued 50 billion yen in five-year bonds and 100 billion yen worth of 10-year bonds.