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Japan Business Confidence Improves

October 3, 2000

TOKYO (AP) _ A closely watched survey of business confidence in Japan showed strong improvement Tuesday, signaling that the world’s second-largest economy is rebounding from its worst slump in decades.

The Bank of Japan’s ``tankan″ survey of business confidence improved to plus-10 in the July-Sept. quarter from plus-three in the April-June period.

It was the seventh-consecutive quarter of improvement and the second-straight quarter that the index climbed into positive territory, meaning more business executives expressed optimism about the future than were pessimistic.

The survey, however, also showed some continuing weakness. Small companies, for example, plan on average to reduce investment by 6.6 percent this fiscal year.

``I’m modestly satisfied with the overall result of the tankan,″ said Finance Minister Kiichi Miyazawa. ``The delay in the recovery among small companies has caught my attention and is probably connected to consumer spending.″

Economic Planning Agency chief Taichi Sakaiya told reporters the tankan underscored the government’s position that the corporate sector was serving as the locomotive in the move toward an economic recovery.

``This says that our assessment is correct: that the economy is moving on the path to a recovery centered on corporate activity,″ he said.

The Japanese economy has shown strong signs of improving in recent months.

The nation’s gross domestic product grew 2.5 percent in the January-March quarter and 1.0 percent in the April-June period. Unemployment in August fell to 4.6 percent from the previous month.

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