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Bank of Japan Says Economy Is Recovering as Exports Spring Back

Japan's economy is recovering as exports and climbing profits inspire companies to raise spending and worker's wages.

In its regular monthly report, the Bank of Japan predicted an end to seven years of falling prices by the end of this year.

Edwin Merner, the president of Atlantis Research Investment, says there are several reasons for the recovery. "There are really three things: One is consumer spending which is very important, capital investments, which are going up very nicely, and to a lesser extent exports, which account for only about 10 - 11 percent of the total GDP," he said.

NTT DoCoMo, Japan's largest provider of mobile phone services, and Rakuten, Japan's leading Internet shopping company, plan to start a joint venture on December first.

DoCoMo will spend $37 million for a 40 percent share in Rakuten's auction business.

Facing increased competition from the many newcomers in a nearly saturated Japanese mobile phone market, DoCoMo is trying to strengthen itself in the area of financial services. And Rakuten intends to take on industry leader Yahoo Japan by making its online auction site available on DoCoMo's mobile phones.

U.S. investment firms Goldman Sachs and Lone Star plan to list their golf businesses on the Tokyo Stock Exchange either this year or next. They bought bankrupt Japanese golf course operators out at bargain prices.

Mr. Merner says the two investment companies seem to feel the time is ripe to make a profit.

"Now it seems that they're about to cash in and probably next year they will list these companies," he added. "Perhaps they will be listed as real estate investment trusts, or maybe as independent companies."

Between them, the two companies own about 180 courses.

Japan's golf courses were once packed with people who paid to play by putting it on expense accounts. That changed dramatically in the early 1990's when Japan's economic bubble burst and such free-wheeling spending came to an end. Since 2000, 470 golf course operators have gone bankrupt.