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Japan's Land Prices Fall for 13th Straight Year  - 2004-09-24

A government survey shows land prices in Japan falling for the 13th straight year. Akio Fukuda at Japan's Real Estate Economic Institute says some metropolitan areas, such as Hiroshima, recorded their largest-ever drops in land values.

Mr. Fukuda says areas where condominiums are being built near transportation links to big cities should do well, but prices for more marginal areas will probably not increase.

The average price for residential property dropped almost five-percent, while commercial land went down more than six-percent. That puts average prices back at the 1986 level for residences. Commercial property is back down at prices seen before 1975, when the government first started the survey.

Economists are now downgrading Japan's growth forecast, saying they see slower growth for the fiscal year ending next March. The revisions come after weaker-than-expected economic data in the second quarter. But analysts say Japan's economy is still on an upward path.

Japan's trade surplus shrank in August for the first time in 14 months. The Finance Ministry says the indicator - measuring all goods exported subtracted from those imported - fell 26 percent to $5.25 billion from the same month a year earlier.

Analysts say the figure is much smaller than the market had expected. Breaking the numbers down by region, the surplus with the rest of Asia was nearly flat while it expanded 5.3 percent with the European Union and contracted a fifth of a percent with the United States.

U.S. financial services giant Citibank has been effectively banned from providing private banking services in Japan. The Financial Service Agency severely punished the bank, accusing it of taking advantage of Japan's deregulation of the sector.

The FSA says investigators found that Citibank's private banking division in Japan gave large loans to a customer accused of market manipulation and allowed transactions suspected of being linked to money laundering.

The Agency also says the unit violated banking regulations by engaging in what it called "extremely malicious transactions" and there was evidence of employee-related fraud connected to foreign currency deposits.