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Natural Disasters Expected to Have Economic Impact in Japan


The spate of destructive natural disasters that have swept Japan recently may also wreak havoc with the country's economy. Some companies are pitching in to help the earthquake-stricken Niigata region. And Softbank makes an acquisition that will help it compete against Japan's top telecommunications providers.

A record number of typhoons followed by the deadliest quake to hit Japan in more than a decade are raising concern among economists. Some are predicting lower consumer spending and a drop in industrial production figures in the months ahead as a result of the destruction.

Some production lines in the Niigata region, hard hit by the string of tremors that began on October 23rd, have been shut down because of concerns about worker safety amid the continuing aftershocks.

Prime Minister Junichiro Koizumi says his government will consider issuing extra bonds to ensure funds are available for disaster relief. Mr. Koizumi says appropriate fiscal measures will be taken to help residents and businesses recover.

Businesses are also pitching in to aid the quake-stricken region. The Uniglo clothing chain says it will donate nearly a million dollars worth of clothes to survivors. Yamaha is giving $200,000 to the Japan Red Cross for quake relief, and is also donating dozens of motorcycles, electric bicycles and generators.

The string of summer typhoons is blamed for hurting clothing sales in September, which fell 8.5 percent compared with the same month last year. The Japan Department Stores Association says total nationwide sales fell 4.4 percent last month compared to a year earlier.

Analysts say another factor besides the weather is signs of a slowdown in Japan's economic recovery, making consumers wary about increasing spending.

Japanese broadband provider Softbank says it will purchase Cable and Wireless IDC as part of its strategy to expand its telecommunications business. Acquisition of the Tokyo-based subsidiary of the British communications giant Cable and Wireless is expected to help Softbank compete more effectively against domestic giants NTT and KDDI.

Softbank says it will acquire the Japanese unit, which offers voice and data communications services, for some $120 million, and take on about $18 million of the company's debt.

In one of Japan's more unusual court cases, judges have reversed a lower-court ruling that a developer must remove the top eight floors of an already constructed, 14-story condominium estate in Tokyo.

The Tokyo High Court agreed with Meiwa Estate, which was sued by residents who contend the four buildings blocked their view of a scenic tree-lined street.

Nearly two years ago, the Tokyo District Court ordered Meiwa to remove the top floors of one of the buildings and pay the plaintiffs about $80,000. The case is now expected to be appealed to Japan's Supreme Court.

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