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Japanese Industrial Production Flattens Out - 2004-09-03

There are signs that growth is slowing in Japan, while the prime minister finds it tough to push his post office privatization plan and Nissan lowers it sales forecasts for Japan and Europe. Those stories are in this week's look at Japanese business news.

Japan's Trade Ministry says industrial production was flat in July compared with June. The ministry blames the performance on slowing output of electronic parts and transportation equipment.

But the ministry expects the August numbers to rise one-and-a-half percent from July and forecasts another increase this month.

The ministry insists that Japanese industrial production overall is continuing to trend upward.

Prime Minister Junichiro Koizumi's government remains deadlocked over plans to privatize the country's postal system. Mr. Koizumi wants the Cabinet to endorse a blueprint for it next week. But members of his policy council remain at odds over the organizational setup for the privatized post office.

Former public management minister, Toranosuke Katayama, strongly opposes the plan.

Mr. Katayama says he does not understand what is the problem with the current system, with postal services being part of a public corporation. He adds the privatization plan does not have much merit.

Japan's post offices employ 270,000 people who sell life insurance and handle savings deposits in addition to delivering mail. The deposits exceed three trillion dollars, making Japan's post office the world's largest financial organization.

Japan's number-two automaker is lowering its domestic sales targets. Nissan says it now expects to sell 220,000 vehicles in Japan over the next 12 months, down from a previously forecast 300,000. It also is cutting sales projections for Europe.

Nissan President Carlos Ghosn puts a positive spin on the numbers, saying the company has made a remarkable recovery under his leadership and that will continue. "In less than five years we have worked to create a significant shift in our company's performance," he says.

Mr. Ghosn adds Nissan is likely to make up the weaker domestic and European sales by selling more vehicles than expected in the United States and China.