JAPAN ECONOMY MAY START BOTTOMING OUT SOON -AGENCY

  Japan's economy remains sluggish but is
  beginning to show signs it may bottom out soon, the Economic
  Planning Agency said in a monthly report submitted to Cabinet
  ministers.
      But a bottoming out of the economy depends largely on the
  yen's exchange rate trend in the immediate future, Agency
  officials said.
      The officials told reporters industrial production, down
  0.5 pct in January from December, is likely to turn positive in
  February and to rise thereafter, raising hopes for a brighter
  economic outlook.
      The Agency predicted industrial production will grow 2.5
  pct in the current January/March quarter after falling 0.7 pct
  in the previous quarter.
      A rise of this size would be the largest since the fourth
  quarter of 1984 when industrial output rose 2.7 pct, the
  officials said.
      They also said an expected upturn in exports would be a
  mixed blessing as it would contribute to economic growth but
  would increase the chance of trade friction.
      Japanese exports contracted five pct in February from
  January but are likely to grow from March if the yen stabilizes
  around current levels, the officials said.
      They predicted exports will increase by 2.3 pct in the
  January/March quarter from the October/December quarter.
      "But the problem is imports are not expanding," said one
  official. Imports fell by 9.4 pct in February from January.
  

