Due to the soaring price of gasoline and the slumping global economy, sales of new imported vehicles in Japan fell 35.5% in August year-on-year. Sales have dropped for four straight months now, and this drop was the largest since 1998. The sales figure totaled only 11,676 units.

Bank of Japan Policy Board member Miyako Suda is pushing for tighter monetary policies by central banks in order to stabilize prices and lower economic growth to a more sustainable rate. According to Suda, lower commodities prices will lead to a stabilized inflation rate. She alluded to higher interest rates to contain prices on oil and raw materials.

Japan's Toyota Motor Corp. group, Mazda Motor Corp. and Nissan Motor Co. all increased both domestic sales and exports to foreign countries in July. Global economic slowdown had automakers worried that exports would fall in the month of July, but the three major automakers reported no such decrease in exports. Toyota group increased exports by 10.2% and domestic output by 4.7% as compared to one year earlier.

Japan is well-known for having developed some of the most sophisticated cell phone technology in the world. However, the country has not been able to successfully market its products to the rest of the world. Japan will now pursue aggressive marketing of its cell phones, especially the Japanese hit, the "wallet phone."

The Bank of Japan left its key interest rate unchanged at 0.5 percent in a widely expected move on Tuesday. The central bank also downgraded its overall assessment of the country's economic conditions for the second consecutive month, saying that "growth has been sluggish", something that has not been heard in the last 10 years. The BOJ also said in a statement that rising energy and raw material costs as well as weak exports have increasingly hurt the economy. The economy however is expected to return gradually to a moderate growth path as commodity prices level out and overseas economies move out of their deceleration phase.

Japanese banks had significantly more corporate bankruptcies and deteriorations in corporate borrowers' earnings from April to June. Credit costs at 119 Japanese banks increased 70% to about 380 billion yen. At the country's 11 major banks and banking groups, credit costs increased 60%.

Due to increasing oil and commodities prices, Japan's corporate goods prices rose 7.1% in the month of July. The increase was the largest Japan has experienced in the past 27 years. Prices only rose 5.7% in June.

In an effort to add stability to the economy, the Japanese government released its outline for an economic policy package. The package will focus on assisting fisheries and agricultural operators to buy more energy-efficient equipment. More issues covered in the package include food safety, securing regular employment, and discounts on expressway tolls. The package was introduced in light of rising fuel and commodity prices.

A government council suggested an average 15 yen increase to the minimum hourly wage. The hike would be the largest increase since the current hourly wage system was introduced in fiscal 2002. The increase is also likely to raise the national average to above 700 yen for the first time. The council divided Japan's 47 prefectures into four categories depending on their economic conditions and recommended greater increases for prefectures with the best conditions.

The Japanese government is ready to report in its August economic assessment that the country's economy has entered into a downturn. The report will indicate that the economic boom starting in February of 2002 may have come to an end. The downturn is due largely to the U.S. economic slowdown, weakening industrial output, and worsening employment conditions in Japan.