Hiroshi Okuda, the leader of the nation's most powerful business lobby, said Tuesday that Prime Minister Junichiro Koizumi's visit to Yasukuni Shrine on New Year's Day will probably affect business deals between Japan and China.
Okuda, chairman of Japan Business Federation (Nippon Keidanren), said Koizumi's visit to the shrine may also influence China's choice of technology for a planned high-speed rail link between Beijing and Shanghai.
Yasukuni Shrine in Tokyo honors Japan's war dead, as well as 14 wartime leaders convicted as Class-A war criminals by the Allied-led international tribunal.
Chinese Premier Wen Jiabao has told France that the construction of the railway, which is being competed over by Japan, France and Germany, would be decided via a public bid process.
Okuda noted that Beijing has yet to notify Japan of this plan.
China, which suffered as a result of Japanese military aggression before and during World War II, has protested strongly over Koizumi's visit to Yasukuni.
Whenever a prime minister visits the shrine, Asian nations that suffered as a result of Japanese aggression and colonial rule express outrage, claiming Japan is reverting to its past militarism.
Meanwhile, Okuda reiterated his belief that sending Self-Defense Forces troops to Iraq is the right thing to do.
"Japan occupies one of the top positions in the global economy and benefits from it. I think it's something Japan should do in light of the Japan-U.S. Security Treaty and many other conditions surrounding us," Okuda said of the SDF's role in the reconstruction of Iraq.