Japan Business News

Once a leading symbol of Japan's rise to global economic might, Toyota has become one of the most visible signs of its decline. And even before the recalls, Japan's rivals from South Korea and China had started overtaking Japan in key industries from semiconductors to flat-panel televisions. And Toyota on Tuesday issued another damaging recall, this time of its popular Prius hybrid. (New York Times)

An unidentified organization won a contract to purchase a state-owned uninhabited islet in the Seto Inland Sea off Kure, Hiroshima Prefecture, for 100,010,000 yen (about $1.12 million) in public bidding Tuesday, bidding participants said. The island up for bids was one of two islets collectively called Mitsugo Island, located about 1 kilometer off Kure. It measures about 580 meters around and 7,600 square meters in acreage. The Finance Ministry held the bidding as part of efforts to sell idle state properties, ministry officials said. (AP)

Japan Airlines, wooed for months by Delta Air Lines with promises of cash and a broad global network, is spurning the world's biggest carrier and opting to keep its alliance with American Airlines. Japan's flagship carrier says it will strengthen its partnership with American and apply to the U.S. government for antitrust immunity on trans-Pacific flights. (CNBC)

Deregulation of the airline industry will be crucial for getting Japan Airlines back on its feet, but the nation should be prepared to accept the ailing airline could be sold to a local rival, according to a former deputy chief of a task force appointed by the government to draw up a plan to rehabilitate the airline. In a recent interview with The Yomiuri Shimbun, Kazuhiko Toyama, who has played a key role in the attempt to revive JAL, also said the clock is against the carrier as it tries to streamline itself under the state-backed Enterprise Turnaround Initiative Corporation of Japan. (Yomiuri)

The government is increasingly concerned about a recommendation issued by the Washington Convention's secretariat Friday that urged the treaty's signatories to adopt a proposal by Monaco to ban trade in bluefin tuna in the Atlantic, according to sources. Japan is the world's largest consumer of bluefin tuna and is set to boost diplomatic efforts to urge signatories to the treaty, formally called the Convention on International Trade in Endangered Species of Wild Fauna and Flora, to reject the proposal at the March 13-25 meeting in Qatar, the sources said. (Yomiuri)

Japanese beer and soft drink giant Kirin said on Monday it had terminated months-long merger talks with its smaller rival Suntory that had aimed to create a top industry player in Asia. "Kirin Holdings Company Limited, which has been in merger negotiations with Suntory Holdings Limited, today announced that the negotiations have been terminated," Kirin said, citing disagreement on whether to list the company. A combined group would have been be the largest in the Japanese beer and soft drink markets with sales of more than 400 billion dollars -- ahead of Belgium-based Anheuser-Busch InBev and Coca-Cola Co. of the United States. (AFP)

Japan's real estate market may be in a slump, but that's not deterring Chinese from scooping up properties. Chinese money--that is from Chinese living in Japan--is making its presence felt in a big way. Businessman Tsuyoshi Tsuyusaki is typical of this new breed of customer. His mantra for all his transactions is to use cash, often involving sums of tens of millions of yen. He picks up properties cheaply, mainly at court-ordered auctions following foreclosure. (Asahi)

Despite the criticism of Toyota over car safety, Japanese citizens still largely view the world's largest automaker with pride -- so much so that some people here wonder whether pressure on Toyota in the U.S. is a ploy to boost American auto producers and undermine Japan Inc. That notion may seem far-fetched to the millions of Toyota owners in the United States and around the world whose confidence in the company has made it the world leader -- and are now simply worried about the safety of their cars. (BusinessWeek)

Walt Disney Co. (Japan) Ltd. agreed to acquire Retail Networks Co., operator of Disney retail stores in Japan, from Oriental Land Co. The stores will become a wholly owned subsidiary on April 1, Tokyo-based Disney Japan said today in an e-mailed statement. Financial terms and the number of stores weren't disclosed. Disney and Oriental Land, operator of Disneyland Tokyo, had been in talks since last year, according to the statement. The parent Walt Disney Co., based in Burbank, California, previously regained control of 220 retail outlets in North America and 120 in Europe, and plans to modernize the stores. (Bloomberg)

In Japan there is a proverb, "If it stinks, put a lid on it." Alas, this seems to have been Toyota's approach to its burgeoning safety crisis, initially denying, minimizing and mitigating the problems involving brakes that don't brake and accelerators that have a mind of their own. President Akio Toyoda, grandson of the founder, was MIA for two weeks and the company has appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide. (Wall Street Journal)

Mitsukoshi department store's Paris outlet will close in September due to sluggish sales amid the global economic downturn, according to Isetan Mitsukoshi Holdings Ltd. Meanwhile, the company said Thursday it plans to open its second Isetan outlet in Tianjin, China, sometime between the end of this year and spring 2011, reflecting the company's plan to expand business in China, where solid economic growth is expected in the future. (Japan Times)

Toyota Motor Corp. is set to formally announce it will recall and voluntarily repair a new model of its Prius hybrid with brake design flaws in Japan and the United States, it was learned Friday. The automaker is currently finalizing procedures for such a recall. Toyota has sold about 300,000 units of the latest Prius in 60 countries and territories. It also is expected to gradually begin voluntary repairs of those cars in countries and territories outside Japan and the United States. (Yomiuri)

The US transportation chief's public rebukes of Toyota's handling of a massive safety recall have raised eyebrows, given the US government's major stake in rivals General Motors and Chrysler. "The optics are terrible because -- and this is what happens when a government owns a company - the two companies that are going to gain the most out of this are General Motors and Chrysler," said Peter Morici, a professor at the University of Maryland's business school. "But their behavior is consistent with the general policy of the US government, whether it's dealing with coffeemakers or cars." (AFP)

As many businesses continue to shake their heads over how tough it is to make sales in these financially difficult times, "cheaper is better" is the strategy of the day, with shops slicing prices for everything from "gyudon" (beef on rice) to jeans. But one thing consumers - especially female ones - will loosen their purse strings for are those little drops of heaven that are sure to melt their darlings' hearts come Feb. 14, say chocolate retailers, whose customer-oriented strategies have seen both luxury brands and affordable sweets fly off the shelves at equal speed. (Japan Times)

Kirin Holdings Co. and Suntory Holdings Ltd. have agreed that Suntory's founding families will hold a more than one-third stake in a new company to be created by a merger of the two firms, sources close to the deal said Thursday. As a result of the basic agreement, Suntory's founding families will also become the largest shareholder in the merged company. In the merger negotiations, the biggest stumbling block had been how Kirin and Suntory would divvy up the stock. Kirin effectively made a concession on this point. (Yomiuri)

Sales at Uniqlo, the casual-clothing chain, fell 7.2% in January after the company sold out of some popular items. The Japanese company, owned by Fast Retailing, said there was a shortage of its Heattech winter range, made of heat trapping fabric. T-shirts and leggings made of the material had nearly sold out in December, the company said. January's sales fall was Uniqlo's first year-on-year decline in six months, and comes after strong trading in 2009. (BBC)

The smaller-than-planned number of expressways to be made toll-free in fiscal 2010, the first year of the ruling Democratic Party of Japan's drive to make highway services free, reflects a belt-tightening budget for the next fiscal year and concerns for anticipated traffic congestion in urban areas and growth in carbon dioxide emissions. The government's decision to scale back the toll-free highway plan in its initial stage means another promise included in the DPJ's manifesto will not be delivered. It is uncertain whether and to what extent highway users will benefit from the plan. (Yomiuri)

New car sales by Toyota Motor Corp., hit by the latest massive recall of its vehicles, dropped 15.8 percent in the United States in January from a year earlier to 98,796 units, falling short of the 100,000 mark in single-month sales for the first time in 11 years, a U.S. research firm said Tuesday. Toyota's sales in the reporting month accounted for 14.1 percent of the U.S. market, overtaken by Ford Motor Co. with a 16.1 percent share, Autodata Corp. said. Toyota was ranked third in the U.S. market share for the first time since June. (Yomiuri)

The Financial Services Agency has started a probe into KDDI Corp.'s possibly illegal plan to buy a major stake in cable television operator Jupiter Telecommunications Co., according to sources. The financial watchdog is concerned the mobile phone carrier's planned share purchase method could violate the financial instruments and exchange law, they said. (Japan Times)

Sharp Corp. said Wednesday it booked its second straight profitable quarter in October-December, its cost-cutting efforts bringing it back from large losses even as sales of flat-screen TVs and other products stayed flat. Sharp booked a net profit of ¥9.1 billion during its third quarter, after a ¥65.8 billion loss a year earlier. The turnaround came despite a tepid uptick in sales, to ¥735.3 billion from ¥735.1 billion. (Japan Times)