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Japan's Trade Surplus Hits Record High - 2004-05-21

Japan's trade surplus has registered a record high, while Sony has confirmed it wants to buy the MGM film studio. And a new soft drink is about to hit the market in Japan. Those are among the stories in this week's look at Japanese business news.

Japan's Finance Ministry says the current account surplus jumped 29 percent from the previous year due to brisk exports to China and other Asian nations. The surplus for the year that ended in March totaled about $155 billion, a record high.

Japan's Sony Corporation has confirmed it is in exclusive negotiations for two weeks with film studio Metro-Goldwyn-Mayer on a possible takeover. The MGM studio library contains 4,000 films, including the James Bond, Pink Panther and Rocky series. But the Standard & Poor's ratings service warns the acquisition could affect Sony's credit rating at a time when the Japanese company is trying boost profitability in its electronics division.

Sony chief executive Nobuyuki Idei says the deal would help the company maintain a dominant position amid what he calls the "tremendous change" in the electronics industry because of the convergence of digital hardware and software.

Mr. Idei tells reporters that Sony also still considers it paramount to produce hit products under the Sony brand.

Many of the company's new digital products have been panned by critics. Some financial analysts also complain that different Sony divisions appear to be competing among themselves as much as against other companies.

Japanese media report three presidents of the UFJ financial group will announce their resignations on Monday to take responsibility for an unexpectedly large loss. The smallest of Japan's mega-banks is expected to book a net loss of several billion dollars for the previous fiscal year as it struggles to shed itself of its huge bad loan portfolio.

Coca-Cola says next month it will introduce a new soft drink in Japan, before the drink hits the market elsewhere. The new product, Coca-Cola C2, is supposed to taste the same as the company's original soft drink but with half the calories.

Coca-Cola Japan Vice President Mamoru Ohara says this is not a test rollout for what he terms the company's biggest product introduction since the original Coke 118 years ago.

"We are not introducing Coca-Cola C2 in Japan to test it because the introduction of Coca Cola C2 has already been decided," he said. "This is Japan taking a lead in the global introduction of this product."

The launch of the new beverage comes as consumption of carbonated drinks has been steadily declining in Japan, with consumers here reaching more often for tea and health drinks.