In this thesis, I address the lack of focus on what are the most common challenges that learners of Japanese experience in their oral interaction and the link between these challenges and their cause. I explore a number of pragmatic challenges that learners of Japanese as L2 encountered during their study abroad programmes or work placements in Japan. Following McKenney and Reeve’s (2012) model for conducting design-based research, the data draws on open-ended questionnaires, semi-structured interviews and focus group discussions with 57 learners of Japanese at two higher education institutions in Ireland to determine the challenges they encountered in their oral interaction with L1 speakers. The challenges which present themselves in the data are examined through Relevance Theory, a cognitive-pragmatic approach that is somewhat unexplored in interlanguage pragmatics research. I demonstrate that challenges at the production and interpretation level arise due to difficulties in decoding and inference of implicit and explicit aspects of communication. These challenges are the result of current instructional practices in the L2 classroom, where there is an excessive focus on linguistic input, an unawareness of learners’ own pragmatic competence and a lack of inferential processes being taught. The findings lend support to the need to enhance pragmatic competence among L2 learners through domain-specific cognitive processes. I argue that ideas developed in Relevance Theory can be particularly beneficial to the teaching and learning of pragmatics in the L2 classroom, in particular for oral interaction. I present a four-process pedagogical framework to help instructors activate learners’ pragmatic competence. This pedagogical framework is based on Ifantidou’s (2014) definition of pragmatic competence. I also outline general guidelines and concrete activities for L2 instructors to help narrow the gap between linguistic form and proposition expressed as well as enhance learners’ production and interpretation of both explicit and implicit meaning