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Japanese Economy Shows Signs of Recovery - 2003-09-19


Japan's economy is showing signs of recovery, and a U.S. investment company is trying to win over some of Japan's wealthiest people.

The Japanese subsidiary of the U.S. investment bank Merrill Lynch is introducing a new strategy. It is targeting the more than one million Japanese people who have more than $1 million in assets. About 17 percent of the world's dollar millionaires live in Japan, and Merrill is offering a series of new investment products to manage their assets.

The financial services offered include insurance products as well as specially tailored stocks, bonds and mutual funds.

Merrill Lynch says it thinks more wealthy Japanese will look for alternatives to keeping their money in Japan's troubled banks, which are trying to shed billions of dollars in bad loans.

Good news for Japan's overall economy: the Bank of Japan upgraded its monthly assessment in its September report, saying that a better outlook for exports will help speed growth.

BOJ governor Toshihiko Fukui says the U.S. economy is growing at a faster pace and is lifting Japanese exports - a vital engine of the nation's economy. He adds that capital spending also is improving, backed up by stronger corporate profits.

There have been other signs that Japan's troubled financial picture is brightening: stocks have rebounded strongly from a 20-year low set in April, and the economy grew one percent in the April to June quarter. However, the BOJ warns that economic activity remains fairly flat.

One of Japan's neighbors is welcoming more Japanese cultural exports after decades of restrictions.

South Korea will lift the last import barriers for Japanese pop songs, video games and movies. Seoul has long banned imports of Japanese cultural products because of bitter memories of Japan's harsh colonial rule of the Korean Peninsula from 1910 to 1945. During that time, Korean culture was suppressed and Koreans were forced to speak Japanese and take Japanese names.

Seoul began removing the ban on Japanese pop-culture after Tokyo apologized in 1998 for its actions during colonial days. The two nations normalized ties in 1965 and have since developed strong trade ties.

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