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Japanese Economy Remains Under Pressure - 2003-02-21

The world's second-largest economy remains weak, with low consumer spending and record unemployment. That is the Japanese government's assessment in its monthly report for February, which is unchanged from January. The report says business conditions are sluggish and investment has bottomed out.

The report also warns that a slowdown in exports, prompted by uncertainty over the future of the world economy, are weighing in.

Officials say they are uncertain of the economic fallout of a possible U.S.-led war in Iraq. But Economic Minister Heizo Takenaka forecasts better times ahead. He told reporters he sees some signs of improvement and is optimistic that the U.S. economy will strengthen, which would help Japanese exports.

In earnings news, two internationally-known Japanese companies posted strong results. Matsushita Electric's net profit for the third quarter came to nearly $180 million, a turnaround from a loss a year earlier.

The giant consumer electronics maker attributes its improved performance to steady sales of audiovisual equipment as well as cost-cutting measures. Like many of its rivals, Matsushita has been struggling to reshape its business by focusing on profitable items and by slashing thousands of jobs.

The country's second-largest beer producer posted a 41-percent surge in net profit last year, to $270 million. Kirin says strong sales of canned drinks made with water and fruit juice offset a declining domestic market for beer.

Kirin plans to launch new products later this year to boost earnings even further.