A strong yen is not good news for Japanese export-driven companies. But the impact of the yen's recent surge against the dollar to three-year highs is expected to be limited for now since firms have hedged the currency risk, economists and major manufacturers said.

If the yen continues to rise over the next year, however, this could cool consumer sentiment -- canceling out gains from cheaper imports -- and eat into corporate profits, they said.

The yen briefly hit a three-year high above 108 to the dollar in Tokyo on Wednesday, having risen about 6 percent since mid-September.