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Japan Business News - 2002-01-28

Two Japanese insurance companies will join forces to cut costs and the head of the nation's top dairy producer says he may resign following fraud allegations.

Sluggish profits forced the merger of Meiji and Yasuda Mutual Life insurance firms forming Japan's third biggest life insurer, with more than $190 billion in assets. Ryotaro Kaneko is the president of Meiji. He says the partnership will create a large life insurer that customers are more likely to trust.

Snow Brand Food says it will halt production of all meat products following a packaging scandal. That followed indications Friday from the company's president that he might resign. He earlier confirmed that the firm abused a government buyback program to help domestic meat companies weather a scare over mad cow disease.

Tsutomu Takebe, Japan's Agricultural Minister, says the government may take legal action against Snow Brand. He says it is a crime and adds that he is considering suing the company.

The scandal is an additional blow to Snow Brand. Its milk products unit caused Japan's worst outbreak of food poisoning nearly two years ago.

In earnings news, electronics giant Sony reported strong results for the last quarter. It said that operating profit rose nearly 10 percent from last year to just over $1 billion. The weaker yen is one factor behind the unexpected increase, because it boosted the value of the company's overseas income.

On Tuesday, the Japanese government is scheduled to report the country's jobless rate for December. It now stands at a record 5.5 percent.