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Japan Reports Modest Economic Gains - 2003-11-14

Japan's economy has expanded modestly and the country's largest telecommunications group has posted a record profit.

Japan's economy grew in the third quarter of the year, marking the seventh straight quarterly increase and the longest expansion in six years.

Gross domestic product, the total value of goods and services produced in the nation, rose .6 percent from the previous quarter, stronger than economists had predicted. On an annual basis, GDP growth stands at 2.2 percent.

The Japanese government says increased capital spending and exports to other Asian countries are helping the economy. But analysts warn that the robust yen, deflation and sluggish consumer spending still pose risks.

Nippon Telegraph and Telephone or NTT, Japan's top telecommunications company, says its profit for the first half of the year jumped nearly 12 fold from the same period a year earlier. Earnings come to $3.5 billion - a record high.

The former state-owned monopoly attributes its performance to cost-cutting and solid earnings from its DoCoMo cell phone unit.

But NTT's President Norio Wada says some operations remain troubled. He says traditional fixed phone line operations are still in decline and warns that the company is still undergoing tough times.

Analysts are calling carmaker Mitsubishi Motors' latest results "disastrous." It lost more than $700 million in the first half compared with a $60 million profit a year ago.

Plunging sales in the United States and bad loans to U.S. car buyers battered the bottom line.

Mitsubishi now forecasts a $100 million loss for the full year.