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Japanese Central Bank Optimistic about Economic Recovery - 2003-07-18

Japan's central bank has issued a positive economic report, fueling hopes that a fragile economic recovery may be gaining speed.

Japan's central bank says the world's second largest economy could be picking up. The Bank of Japan has upgraded its monthly economic assessment for the first time in a year.

The report says exports, a key engine of growth, are showing a gradual improvement and that business sentiment among major manufacturers is recovering.

Bank of Japan Governor Toshihiko Fukui predicts that business investments will start to increase and says he also expects more economic activity in other spheres.

At the same time, however, the central bank remains cautious about Japan's long-term prospects. It notes that domestic demand is weak and consumer spending remains sluggish after three recessions in the last decade.

The number of corporate bankruptcies in Japan is falling. A study by a private research firm says bankruptcies declined nine percent in the first half of this year from the same period last year for a total of 8,984 cases.

The firm says job cuts and other strategies to improve profitability are behind the drop in figures. Despite the improvement, the number of failures is still very high.

Yahoo Japan, the country's leading Internet portal, says its earnings doubled in the first quarter of the year. Net profits for April to June totaled $38 million, up eight percent from the pervious quarter. The company attributes that performance to brisk growth in online advertising and auction businesses.

Because of that, Yahoo Japan has applied to move its shares onto the main market for Japanese stocks. It now trades on a much smaller market for start-ups. The company says it aims to attract more big investors.