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Japan Business Wrap: Honda Posts Strong Profits - 2002-08-02

Japan's Honda Motor posts strong quarterly results, while growing competition forces two Japanese steel makers to consolidate.

Japanese automaker Honda Motor achieved its best-ever quarterly profit in the three months to June. It earned $900 million in that period, up 20 percent from one year ago.

Japan's second largest automaker attributes its healthy performance to strong sales in the United States and a favorable exchange rate. Like its competitors, Honda forecasts that the recent appreciation in the yen will not hurt the company's business.

Toyota, the world's third largest car maker, raised its global sales target for this year to more than 6.2 million vehicles. Toyota officials say that popular models such as the Corolla are boosting sales in Europe, Asia and the United States.

Toyota's president, Fujio Cho, told reporters that the sharp decline in U.S. stock prices has not damaged his company's sales. However, the auto giant says it may restructure its domestic operations, due to falling demand at home.

Kao, Japan's biggest home products maker, has unveiled a plan to buy John Frieda Professional Hair Care of the United States. Kao, through its U.S. unit Andrew Jergens, will pay $450 million to buy the company, which sells premium shampoos and styling agents.

The move is a part of Kao's global strategy to strengthen its share of the U.S. market. Last year, Kao lost a bid for hair-care giant Clairol, and has since been looking for takeover targets.

Corporate consolidation continues in Japan. Kawasaki Steel, the nation's third-largest steel maker, has agreed to tie up with Nippon Yakin Kogyo, which makes stainless steel. Their products are used in items such as automobile parts and electronic components.

The alliance will focus on production, sales, research and development to fight severe competition in the steel industry.