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Japan Reports Rise in Export Surplus, Boosting Overall Economy

Japan has registered strong export surpluses, and U.S. investment bank Goldman Sachs has sold a large portion of its Mitsubishi shares. This and more in our weekly look at Japanese business news.

Japan's economy continues to grow, with strong export surpluses in the April to September period. The Finance Ministry says exports increased by 5.9 percent, to $281.5 billion, despite higher prices for oil and other raw materials.

The government says the overall economy increased by 1.7 percent, the fourth straight quarter of growth.

Edwin Merner, the president of Atlantis Investment Research Corporation, says analysts had expected the price increases to have a negative impact on the export balance. He says increased demand among Japan's customers is the main reason for the surplus.

"It is demand, especially from China, Asia and the United States - [which] remained quite strong, especially for manufactured goods such as automobiles, high technology products, electronics, [and] for machine tools - and this helped to increase the demand for Japanese products," said Edwin Merner.

Mr. Merner says Japan's economy also continues to expand for other reasons.

"It is not just exports," he said. "[Domestic] consumer spending is also strong - and capital investments, which account for maybe 16, 17 percent of GDP, are also strong. So you have three locomotives pulling up the economy: exports, consumer spending , which accounts for almost 60 percent of GDP, and also capital investments."

U.S. investment bank Goldman Sachs has sold a large portion of its shares in Mitsubishi Motors, reducing its stake in the carmaker from 13.5 percent to only 1.4 percent.

Goldman, which used to be Mitsubishi's largest shareholder, now moves down to seventh on the list.

Mitsubishi Motors has faced a number of financial problems since it admitted five years ago that it had hidden auto defects over the previous 20 years, because it did not want to recall any cars.

Details of the Goldman Sachs sale and the names of the purchasers of Goldman's stock were not disclosed.

In the housing industry, more than 8,800 condominiums were put on sale in Tokyo in October, the highest number for any month in 2005, indicating a rebound in the real estate market.

But Japan's economic news was not all bright in October, as corporate bankruptcies increased by 4.1 percent from a year earlier.