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Rising Energy Costs Spark Concern in Japan - 2004-08-06

Japan is growing concerned about rising energy costs. The country is dependent on imports for almost all of its oil, and the rising cost of crude is having its affect on prices.

Economy Minister Heizo Takenaka says he is worried about the impact on domestic consumer spending, as well as how it will effect demand for Japanese exports.

Mr. Takenaka says rising oil prices could have a serious impact on both the Japanese and global economies.

For most Japanese automakers there is no sign of a slowdown, at least in terms of overall profits, but some warning signs have been spotted in the sales figures.

Both Toyota and Suzuki have reported increased quarterly profits. Toyota, Japan's largest automaker, saw a nearly 30 percent rise in its net profit in the April-through-June period - totaling $2.6 billion. Suzuki, which specializes in small cars, had a 31 percent gain for the quarter, which it attributes to improved sales in Europe.

But Mitsubishi Motors, facing recall scandals and resulting legal troubles from an attempt to cover the matter up, has reported a net loss of seven percent for the second quarter. The struggling automaker expects its group net loss for the year to exceed two-billion dollars.

The Japan Automobile Dealers Association says for the entire industry, new vehicle sales in the country fell in July. That includes sales of imported cars, trucks and buses, which dropped nearly 2.25 percent last month compared to July 2003.

The British ambassador is trading in his diplomatic passport for a management post in a Japanese company. Hitachi says Stephen Gomersall, who was ambassador to Japan until last month, will soon start work as the company's chief executive for Europe, based in London.

Mr. Gomersall has spent a total of 14 years in Japan as a diplomat.