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Japanese Business Confidence Up as Economy Expands - 2004-03-05

Japanese executives remain hopeful about the economy and Japan's largest bank has moved to reassure investors and the public.

Business confidence is growing in Japan, where the economy is expanding at its fastest clip in 13 years. A Ministry of Finance survey shows that large companies expressed optimism for the second quarter in a row in the January to March period.

According to the survey, which measures optimism on a numerical scale, confidence is now at 5.1 compared with 5.3 last quarter. A positive number indicates that optimists outnumber pessimists.

Business executives say a recovery in corporate investment and exports is fueling their hope, as is Japan's improved growth rate, now at 7 percent on a yearly basis.

Japan's largest bank in terms of assets, Mizuho Financial Group, is moving to restore public confidence after receiving a government bailout in the late 1990's.

The bank says it plans to return more than $4.5 billion to government coffers. It owes more than $20 billion in public funds.

Mizuho, like other Japanese banks, has shouldered a heavy load of bad debts, and is finally reducing them. The government has spent billions of dollars shoring up the banking system over the past several years.

As concerns rise about mad cow disease and bird flu, the Japanese arm of American fast food chain McDonald's has unveiled a new product that contains neither beef nor chicken. The fast food chain - the largest in Japan - will now sell fried fish served with sauce.

McDonald's Japan's new chief executive officer, Eiko Harada, says he hopes the new item will attract customers.

He says he decided to serve fish because most Japanese eat it more than twice a week.

McDonald's Japan hopes the new product will help it improve earnings after two years of losses. It is forecasting a small increase in sales for the year, up to $2.7 billion.