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Japanese Business Confidence Improves - 2003-12-05

Japanese business sentiment has improved in the world's second-largest economy.

Japanese companies are optimistic about the country's economy for the first time in almost three years - thanks to healthy exports.

A quarterly survey by Japan's Finance Ministry shows business confidence increased to more than five points in the October to December quarter, from minus five points in the previous three months.

The survey subtracts the percentage of firms that believe business sentiment will get worse from the percentage that expects it to bet better. A positive number means there are more optimists than pessimists.

But the index remained negative for smaller businesses, which are fighting to stay afloat after Japan's three recessions in a decade. The smaller firms' index was minus 20 in the same quarter.

Meanwhile, U.S. investment fund Colony Capital will buy a baseball stadium and a hotel in Southern Japan from Daiei, a financially troubled Japanese retailing giant. The nearly $1 billion deal is part of Daiei's restructuring plan to cut debts of more than $8 billion.

Daiei's president, Kunio Takagi, says he will maintain control of the company's baseball team, the Daiei Hawks - currently the national champion.

Mr. Takagi says Daiei's financial problems are due to falling real estate prices in Japan. He adds that he wants to unload properties in order to improve the company's balance sheet.

In other news, electronics and entertainment giant Sony says it will introduce a new merit-based pay system for all of its 12,000 rank and file workers in Japan. It has already done so for its 6,000 domestic managers.

Salaries for Sony's employees reflect a traditional seniority-based pay scale as well as allowances for housing for workers with children. Sony is the first major Japanese electronics company to introduce such a system. It says the move will allow deserving workers to boost their earnings faster than they ever could before.