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Japanese Steelmaker Gets Boost From China - 2003-11-21


Japan's biggest steelmaker has gotten a boost from China, but profit fell at the nation's top utility after a safety scandal.

China's huge appetite for steel lifted earnings at one of Japan's biggest metals companies.

JFE, the country's top steelmaker, reports earnings for the first half of the year more than doubled to $413 million from last year.

JFE and other Japanese steelmakers have raised prices as demand from China has grown, forcing other customers, such as Japanese carmakers, to pay more for steel as well. China buys about 30 percent of the world's steel to manufacture vehicles and electrical appliances.

Japan's largest power utility has reported weak earnings. Tokyo Electric Power, or TEPCO, says its first half profit dropped 44 percent to $800 million from the same period a year earlier.

TEPCO blames the decline on the shutdown of its nuclear reactors and an unusually cool summer that cut the use of air conditioners.

The company was forced to close its 17 nuclear plants earlier this year for safety checks following scandals over falsified data. The cost for the closure is estimated to be around $2.7 billion. Five reactors have since resumed operations.

The Japanese government says the nation's 13-year economic slump is ending, but it remains cautious about the pace of the recovery.

In a monthly economic report, the Japanese government raised its economic assessment for November, the first upgrade in two months.

Economic Minister Heizo Takenaka says several factors are fueling optimism.

He says healthy exports to the United States, rebounding corporate investment and consumer spending have boosted the outlook. He adds that he is hopeful the current trends will continue.

Despite the improved outlook, the report noted that volatility in the Japanese currency and the country's stock market are cause for concern. The yen recently climbed to a three-year high, making Japanese products more expensive for overseas buyers and pushing the stock market to a three-month low.

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