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Economic Activity Higher in Japan


Japan's government says although the country's trade surplus is shrinking, the domestic economy is continuing to show signs of improvement. In the auto industry, Nissan will use technology supplied by its main rival to enter the hybrid-car market. And one of Japan's best-known brands, Sony, has endorsed a distinctly non-Japanese face at the top of the company.

The Trade Ministry says Japan's economic activity rose one-point-seven percent in April, surpassing the expectations of many economists. The index - considered an indicator for gross domestic product - was below 103 in March, but rose above 104 in April. Economists say this suggests the Japanese economy, which has been in and out of recession for more than a decade, is on an upswing.

The picture is not so rosy, however, with Japan's merchandise trade surplus. It shrank in May more than 68 percent compared with a year earlier - the second straight monthly drop. Those numbers are worse than economists had expected.

The Finance Ministry data show that the trade surplus with the rest of Asia shrank more than 40 percent, for the seventh straight monthly decline. But the surplus with the United States rose 4.5 percent in May.

For the near future, large Japanese companies are growing a bit more optimistic about the economic outlook. The Finance Ministry says its quarterly survey on the subject backs up the government's stance that the economy is likely to pull out of its latest slump.

The man credited with bringing Japan's number-two carmaker back from the brink of bankruptcy says Nissan may have to begin focusing on smaller and more fuel-efficient cars because of record high oil prices.

Carlos Ghosn now heads both Nissan and its parent, Renault of France. He says the company must listen to what customers want, including a demand for cars that will consume less fuel, no matter how difficult the change might be for the automaker. "So it's very challenging. But, at the same time, because it's challenging, it's risky," he said. "It has to be hard."

Nissan has announced it will build its first hybrid vehicle at a plant in the U.S. state of Tennessee late next year. The gasoline-electric-powered Altima model will use some high-tech hardware supplied by Toyota, Nissan's main rival. The two automakers made such an agreement three years ago, but Nissan says it will replace the Toyota components with its own hybrid system in the future.

Shareholders of struggling consumer electronics and entertainment giant Sony have approved a management reshuffle. As expected, Vice Chairman Howard Stringer, a Welsh-born American, was given the nod to be the first non-Japanese chief executive officer in the company's 59-year history.

Sony is reporting a 4.5 percent drop in consolidated sales in the business year that ended in March. It blames reduced sales of cathode-ray tube television sets and portable audio equipment.

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