JAPAN: ECONOMY CRISIS CONTINUES

Japanese/English Japan's economy continues to shrink as the nation's gross domestic product declined by point-seven per cent between July and September period. That means Japan's economy is contracting at an annual rate of two-point-six percent and if the trend continues, the economy will shrink for the second consecutive year, which hasn't happened since the end of World War Two. The figure was released after the stock exchange closed in Japan - finishing lower with the Nikkei Stock Average shedding one-point-nine-three per cent. SUGGESTED VOICEOVER: Japan's stock exchange, prices faired badly and finished sharply lower amid uncertainties about the outlook for U-S stocks. This was before the release of Japan's gross domestic product (GDP) figure - the measure of all goods and services produced in the country. The GDP decline was nought-point-seven per cent in the three months from July through to September. The Japanese economy shrank for the fourth straight quarter, continuing to wallow dangerously in the nation's deepest recession in decades. Before the GDP figure was released, the benchmark 225-issue Nikkei Stock Average lost one-point-nine three per cent, closing the day's trading at 14,697.08 points. The U-S dollar rose sharply following the release of the new GDP figure. The Economic Planning Agency said Japan's economy contracted at an annual rate of 2.6 percent. If the trend continues, the economy will shrink for the second consecutive year - something the Japanese economy has not done since the end of World War Two. Japan has been battered by Asia's financial meltdown, which has slashed exports. Financial experts say it's going to be hard for the economy to recover. SOUNDBITE: (English) "The outlook is still quite poor. Income is falling profits are falling, export demand is still weak. So that the maybe I think the bottom could be hit around the middle of next year but probably not before that." SUPER CAPTION: Peter Morgan, Senior Economist, HSBC Securities, Japan People in Japan say they don't know what has hit them. Masanori Iwasa had never experienced a recession this severe in his 60-year career. Iwasa runs a factory with 51 employees in Kawasaki City, on the outskirts of Tokyo where more than two-thousand small manufacturers are concentrated. He became one of the pioneers who led the semi-conductor industry in Japan but his factory halved its sales in the last three months. Three employees were laid off in November. His 70-thousand U-S dollar machine centre remains unused. SOUNDBITE: (Japanese) "This machine cost us 70-80 million yen. But, there is no work. So, it is not in operation." SUPER CAPTION: Masanori Iwasa, President, Excel Precision Apparatus Co Iwasa worked seven days a week when the economy was good. Decline in demand forced the factory to close for three days a week. If Japan's economy does not recover in the next six months, he will have to face even more dismal future. SOUNDBITE: (Japanese) "If the economy does not revive within the next three months or by next spring, if this recession prolongs longer, we will have to have a complete restructuring scheme. We may not survive without laying off one third of our employees. SUPER CAPTION: Masanori Iwasa, President, Excel Precision Apparatus Co Kawasaki city recorded a more than ten per cent drop in the numbers of small manufactures last year. You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/31ffdc19756e911d53f2af8d118913fd Find out more about AP Archive: http://www.aparchive.com/HowWeWork