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Japan household spending up in March ahead of tax increase TEPCO books profit

TOKYO, May 2, (AFP): Japan’s household spending jumped in March ahead of a sales tax rise while the jobless rate remained at its lowest level in more than six years, official data showed Friday. Spending rose 7.2 percent year-on-year as consumers snapped up purchases before the April 1 tax rise to 8.0 percent from 5.0 percent, the internal affairs ministry said. Japan’s first sales tax rise in 17 years is seen as key to taming its huge national debt but there are fears it will hit consumer spending, denting the country’s economic recovery. Purchases of big-ticket items were markedly higher, with spending on refrigerators and vacuum cleaners more than quadrupling from a year earlier and air conditioners logging a five-fold jump. Spending on beds was six times higher and purchases of computers more than doubled. The ministry said in a separate survey that the nation’s unemployment rate was 3.6 percent in March, matching the rate in February, which was the best reading since July 2007.

The operator of Japan’s crippled Fukushima nuclear plant said Wednesday it booked a $4.3 billion annual net profit owing to an electricity rate hike and a massive government bailout following the 2011 disaster. Tokyo Electric Power (TEPCO) was teetering on the brink as cleanup and compensation costs stoked huge losses and threatened to collapse the sprawling utility until Tokyo stepped with a multi-billion dollar rescue. The company at the centre of the worst nuclear accident in a generation said it earned 438.65 billion yen ($4.3 billion) in the fiscal year to March, compared with a net loss of 685.3 billion yen in the same period a year earlier. Sales rose 11.0 percent to 6.63 trillion yen, it said.

The company’s results got a boost from a rate hike, and helped offset a decline in the amount of electricity TEPCO sold owing to warmer-than-usual winter weather, it said. It also booked a special gain of 1.8 trillion yen based on funds the company received from a government-backed bailout fund as well as asset sales. But it added that rising fossil fuel costs after Japan switched off its nuclear reactors were pressuring its bottom line. “The business environment that surrounds us remains very serious,” TEPCO president Naomi Hirose told a news conference. The Fukushima plant’s cooling systems were swamped by the 2011 tsunami, sparking reactor meltdowns and radiation leaks. Tens of thousands of people were evacuated from around the plant with decommissioning of the site expected to take decades.

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