TOKYO (AFP) - The newly appointed head of Japan's top business lobby said on Tuesday he wants to play a greater role in helping the country improve its badly frayed relations with China.

Sadayuki Sakakibara was formally appointed as chairman of Keidanren - the Japan Business Federation - at the annual meeting of the influential group in the world's third-largest economy.

"For Keidanren, relations particularly with the neighbouring countries of China and South Korea are important," he told the meeting.

"Improving ties with China and South Korea is one of the lobby's top agenda."

The 71-year-old chairman of synthetic materials maker Toray told local media that Japan Inc's environmental technologies could help ease tense diplomatic ties with China, its biggest trade partner.

"China really wants (Japanese environmental technologies)," he said, according to the Yomiuri Shimbun newspaper.

Japan's relations with China and South Korea have been badly strained by emotional territorial disputes and bitter memories of Japanese soldiers' atrocities in Asia before and during World War II.

Those already chilly diplomatic relationships got colder after the nationalist Shinzo Abe became Japan's prime minister in late 2012.

Big business has generally welcomed Abe, with his domestic emphasis on trying to kickstart the slumbering economy.

Sakakibara pledged the business lobby "will work with the political side even more closely than before in order to reconstruct Japan.

"Keidanren will further strengthen the partnership with politics and express constructive opinions, making our utmost effort to build a strong Japan, a strong economy."

His predecessor Hiromasa Yonekura once criticised Abe's unconventional and aggressive monetary policies as "reckless", shortly before the Liberal Democratic Party leader took office.

Abe's economic programmes remain controversial, not least because they have added yet more debt onto Japan's staggering pile of IOUs.

However, they have markedly perked up corporate confidence and consumption, driven up Japanese shares and lowered the value of the yen, giving a boost to exporters.

"Stock prices are going up and the yen's appreciation has been corrected. Now we are seeing a way forward to get out of deflation that has haunted Japan for a long time," Sakakibara told reporters after the Tuesday meeting.

"We, from the entire economic sector, highly praise the path the Abe government has taken in the past year and a half."

A package of reforms to areas such as employment law, aimed at making life easier for the business community, is also expected.

Sakakibara has reiterated the lobby group's call to cut the corporate tax rate to 25 per cent, from the top effective rate of 35.64 per cent in metropolitan Tokyo, to spur growth, according to the Nikkei.

And he voiced support for tentative government plans to raise consumption tax to 10 percent in October 2015 as scheduled, major media said.

The tax went up from five percent to eight percent in April, to cheers from economists who said it was desperately needed if Japan was to get its fiscal house in order.

Abe has given himself until the end of this year to decide whether to raise the tax to 10 percent.