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Indicators Show Expansion in Japan's Economy - 2004-04-09


New data show Japan's index of leading economic indicators going above 50 points, a sign that the country can expect continuing economic growth in the next three to six months. The release of the preliminary February numbers comes as the Tokyo stock market rallies amid growing optimism for a sustained economic recovery here.

In another endorsement for Japan's recovery, Moody's Investors Service on Wednesday raised its credit rating on Japan's foreign currency government bonds to the highest level.

Japan's currency, the yen, continues to trade around four-year highs. Although Japan appears to have halted its massive dollar buying in the market, Finance Minister Sadakazu Tanigaki says the central bank will intervene if needed to stem volatile currency swings.

Mr. Tanigaki denies media speculation that foreign exchange intervention has been scaled back to avoid giving the perception that Tokyo is interfering with the November presidential election in the United States.

While a more expensive yen hurts exporters, such as auto makers, Japan's top carmaker has something to celebrate. The Japan Automobile Dealers Association says Toyota's Corolla passenger car has recaptured its position as the country's best-selling motor vehicle. Toyota sold nearly 191,000 Corollas in 12 months through March, topping Honda's Fit compact model, which had sales of 158,000.

There is trouble, however, for Mitsubishi Motors. The Transportation Ministry says the company faces criminal charges for an alleged cover-up concerning its trucks. The company failed to tell the ministry that some wheel hubs developed cracks.

Transportation Minister Nobuteru Ishihara announced the charges. He said the ministry is filing a criminal complaint contending that Mitsubishi hid information related to accidents caused by wheels detaching from the trucks.

The truckmaker had blamed the accidents on inadequate maintenance.

Seven Eleven Japan is expanding into China. The convenience store chain says its first Chinese outlet will open next Thursday, April 15, with four more stores to follow in the capital by the end of May.

The Japanese company will own the majority of the Chinese venture in partnership with the Shoulian Commercial Group and China National Sugar and Alcohol Group.

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