A Japanese government report shows that business confidence among large companies is slipping further, while an American entertainment giant expands its presence in the country.
A quarterly report by Japan's finance ministry shows that large Japanese companies are increasingly gloomy about business conditions, especially in the technology sector.
An index of business sentiment, reflecting corporate views on the economy, shows a drop of five percentage points for the July-to-September quarter, compared to the previous three months. The index is calculated by subtracting the percentage of firms that say business has worsened from those that cite improvement.
James Malcolm is an economist for investment bank JP Morgan in Tokyo. He says that a factor behind the index's result is the close link of Japan's business cycle to that of the United States. "The downturn in the U.S. manufacturing sector since the end of last year was led by high-tech (companies), and that has also been the case in Asia, and definitely in Japan. You can see it in terms of sector reports and sales and profits," he said. "You can also see it in the export figures. Japan's exports have been hit particularly hard in terms of electronics components that go into products that get shipped to the United States and Europe," Malcolm said.
Japan's auto sector is also coming under pressure. A recent report by the Japanese auto workers' labor union foresees almost 150,000 job cuts in the next four years. The report cites a declining global car market and severe competition. It also notes that Japanese manufacturers are moving production overseas, where labor is cheaper.
While many Japanese businesses have fallen on hard times, Walt Disney of the United States is expanding in Japan. It opened a theme park near Tokyo Tuesday, attracting thousands. The ocean-themed entertainment park, called Disney Sea, cost about $3 billion to build. It is next door to Tokyo Disneyland, the company's most successful park in the world.
Joji Yasuoka is a spokesman for Oriental Land, Disney's local partner. He thinks that, together, the two parks will attract up to 25 million visitors a year. "Other theme parks built in Japan have not been largely affected by the country's economic situation. I believe that Disney Sea will not be influenced by the current recession either," Yasuoka said.
Finally, Beijing is demanding that Japan's number two mobile phone-maker, Matsushita, stop selling handsets in China for one year. Beijing says software on Matsushita's cell phones describes Taiwan as independent. China regards Taiwan as a rebellious province that must be reunited with the mainland. China is the world's largest cell phone market.