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Japan Inc shrinks at record pace

TOKYO, Jun 4 – Japan\’s corporate sales, recurring profits and capital spending all plunged at record rates in the first quarter due to the global downturn, a government survey said on Thursday.

Japan Inc\’s recurring profits fell 69.0 percent from a year earlier to 4.27 trillion yen (44.35 billion dollars) in the three months to March, the finance ministry said in corporate data excluding the financial and insurance sectors.

It was the sharpest drop since comparable figures became available in 1955 and the seventh straight quarter of declines, according to the ministry\’s quarterly survey of corporations\’ financial statistics.

Manufacturers, the main drivers of Japan\’s export-led economy, between them posted their first ever recurring loss of 2.25 trillion yen as the worldwide downturn hit demand for the country\’s cars and high-tech exports.

Combined sales reported by corporate Japan both at home and abroad caved by a record 20.4 percent, the ministry said.

As recession-hit companies slashed new investments, their total capital spending plunged by 25.3 percent, the eighth straight quarter of decline and the fastest pace since comparable data became available in mid-2002.

Tokyo has recently said it believes Japan\’s worst post-war recession hit bottom in the first quarter, when the world\’s second largest economy shrank at a record annual pace of 15.2 percent.

To collate the survey, the finance ministry surveyed 28,827 firms capitalised at 10 million yen or more, of which about three quarters responded.

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