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Major Japanese Companies Report Strong Earnings - 2004-02-06

In Japan, there are some healthy earnings reports from major companies and the central bank leaves interest rates almost at zero to fight deflation.

Some of Japan's corporate giants have released strong earnings reports, raising hopes that the economy is strengthening after ailing for more than a decade.

NTT DoCoMo, Japan's top mobile phone operator, says it posted a net profit of $4.7 billion in the nine months to December, beating last year's earnings.

The company, which licenses some of its services overseas, is performing strongly in international markets but it continues to battle against heavy competition in Japan.

Electronics giant Hitachi says it earned $24 million in the last three months of 2003, a turnaround from a loss of $20 million from the same period a year earlier.

Executive Vice President Yoshiki Yagi tells reporters what accounts for the pick-up.

He says improved sales of digital home appliances helped the company's performance.

NEC, Japan's leading manufacturer of mobile phones, has agreed to sell its plasma display business to Pioneer, the country's largest maker of electronic car navigation systems.

In a separate transaction, NEC will sell part of its computer chip operations to Advanced Semiconductor Engineering of Taiwan.

The Bank of Japan is trying to fight deflation and stop the yen's advance on the dollar. After a board meeting Thursday, it left interest rates nearly at zero. That keeps borrowing costs low so that companies and consumers have access to credit. The bank hopes that the super-low interest rate will spark more spending.

The bank also decided to keep an abundance of money available to commercial banks to slow the appreciation of the yen by increasing the amount of yen in circulation. In the last year, the Japanese currency has risen 13 percent on the dollar, making Japanese exports more expensive and driving deflation by making imports cheaper.