06 September 2002
Weak capital spending and poor business sentiment is leading some analysts to think the Japanese economy remains fragile.
Japan's Finance Ministry says capital spending by non-financial companies fell 15 and a half percent in the second quarter from the same period last year. That is the third straight quarterly decline. The ministry attributes the drop in spending to a continued slump in demand for information-technology products.
In a separate survey, business sentiment for large companies fell in the July to September period from the previous quarter. The Finance Ministry says, in contrast, that sentiment among small companies actually improved. But overall, analysts say, companies remain pessimistic about Japan's economic recovery.
Despite the economic doldrums, one of France's luxury brands is expanding its retail presence in Japan. Luis Vuitton has opened its largest store in the world in Tokyo's Omotesando fashion district. Hundreds of customers, mainly young women lined up to buy handbags and wallets as the doors opened and the store, the company's 44th in Japan, racked up sales of more than one-million dollars on the first day.
The president of Louis Vuitton Japan, Kyojiro Hata, said Asia accounts for about half of the retailer's sales and nearly a third of that comes from Japan. Mr. Hata said that luxury brand items hold their value no matter how many of the same items are sold. This is because, he says, customers adore such goods.
Despite the economic woes, the company predicts it will see double-digit growth for sales in Japan for the second year in a row.
In another example of Japanese-European business cooperation, Philips, based in the Netherlands, and Sony have jointly unveiled a new wireless technology.
They say it will allow users to transfer high-quality images and data over short distances using such devices as computers, video game consoles, mobile phones and digital cameras. The catch is the transmitting and receiving devices must be within 20 centimeters of each other.