The Japan Business Federation (Nippon Keidanren) said Friday that foreign workers should be allowed to stay longer in Japan and that the government should establish a green card system in a bid to increase the foreign workforce here.

Japan's most powerful business lobby said in an interim report that Japan needs more foreign workers to improve the competitiveness of the nation's industrial sector and to cover labor shortages in the nursing care sector.

It proposed that foreigners who receive job-training in Japan should be allowed to stay here for five years -- on condition that they improve their Japanese language skills to a certain level.

The relevant period of stay is currently limited by law to up to three years.

The business fields in which foreigners should be able to receive training should be expanded to include nursing care and aesthetic businesses, such as hair salons, it added.

The establishment of a green card system here would allow foreigners engaged in professions such as law, medicine and accounting to live in Japan permanently, the report says.

Meanwhile, foreign students who graduated from Japanese universities with good grades should be allowed to stay in Japan for a year after graduation to find jobs in Japan, the report says.

The government should set up a special body tasked with attracting more foreigners and with handling problems that foreign residents face here, including housing, education and social security, the report says.

Nippon Keidanren will deliver a final report in March.