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Key Japanese Economic Gauge Goes Up

Japan's Cabinet Office says the country's economy appeared to be in better shape in May. It says a key gauge was more than 5.5 percent above the 50 percent boom-or-bust line. The index was below that line in March and April. But the office's economists are keeping their basic assessment of the state of the economy unchanged - terming it still in a recovery phase.

The head of the Bank of Japan agrees with that assessment. Central bank Governor Toshihiko Fukui is keeping interest rates near zero in order to stamp out deflation. Speaking at a meeting of the bank's branch managers, Mr. Fukui said a gradual increase in production is more than offsetting a slowdown in exports.

Japanese electronics maker Sanyo has announced it will slash 14,000 jobs at home and overseas in the next three years - some 15 percent of its global work force. The company aims to eliminate its interest-bearing debt by $6 billion, even as it faces stiff competition, especially in the digital camera arena.

The company's new chief executive officer, a former television anchorwoman named Tomoyo Nonaka, told reporters in Osaka that Sanyo faces a painful three-year restructuring under a plan entitled "Think Gaia," a reference to the Greek goddess of the Earth.

She says company's much-needed new strategy calls for it to "listen to the voice of the Earth and please the planet instead of polluting it."

Ms. Nonaka, who has no previous background in corporate management or electronics, also rebuffed critics who call her a puppet of a real leadership enmeshed in nepotism. Sanyo's new president is the son of Ms. Nonaka's predecessor.

U.S.-based investment bank Goldman Sachs is to take effective control of Universal Studios Japan once the struggling theme park makes an initial public offering of its stock.

USJ officials say that when the company goes public, Goldman Sach's venture capital arm will acquire more than a 46-percent stake in the Osaka attraction. The Osaka municipal government, presently USJ's largest shareholder, will see its stake drop to below 11 percent. At present, the city holds a 25 percent share.

Goldman Sachs will inject $180 million into the park, with an additional $45 million of investment coming from the Development Bank of Japan. USJ's operator says most of the new capital will be used to retire debt.