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Japanese Central Bank Cuts Economic Outlook - 2002-11-22


The Bank of Japan (BOJ) downgrades its economic assessment for the first time in 11 months, saying the economy has stabilized, but a further recovery is uncertain.

The BOJ warns the pace of the U.S. economy is slowing, and since the U.S. is Japan's top trading partner, Japan's exports and industrial production are expected to suffer as a result. Japan's move out of recession in the last year has largely been due to strong overseas sales.

Despite the unclear picture, earnings reports from two of the country's corporate giants are healthy. NTT, the world's largest telecommunications company in terms of sales, returned to profit in the first half of the year.

It earned $272 million, compared to a huge loss for the same period last year, thanks to cost cutting. However, NTT's revenue fell for the first time, due to tough competition. NTT President Norio Wada told reporters the company needs to find new sources of income. He said it is urgent to develop new markets centered on the broadband [internet] business.

In the automobile sector, Nissan Motors posted a record profit for the first six months. Net profit rose 25-percent to nearly $2.4 billion. The country's third largest automaker says cost reductions, growing sales in the United States and the launch of six new models are behind the strong performance.

In recent weeks, Japan's two other top carmakers, Toyota and Honda, also posted record half-year results.

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