PRICIER RESOURCES FUEL UPTREND IN JAPAN TRADING FIRMS' PROFITS

Buoyed by rising natural resource prices, three of Japan's four major trading companies saw consolidated net profits for the July-September quarter rise from the prior three months.

"The strong yen worked against us, but we were still able to generate solid earnings," Ryoichi Ueda, an executive vice president at Mitsubishi Corp. (TSE:8058), said at a news conference Friday. Mitsubishi logged a net profit increase of 3 per cent on the quarter to 69.6 billion yen.

The Japanese currency advanced about 10 yen higher against the dollar than Mitsubishi's assumed exchange rate. However, the firm benefited from profit gains on spot trades of coal used in steelmaking as crude steel production heated up in China and other markets.

Encouraged by its brisk performance for the six months ended in September , Mitsubishi has upgraded its full-year net profit forecast by 20 billion yen to 240 billion yen, which would mark a 35 per cent decline on the year.

Sumitomo Corp.'s (TSE:8053) net profit for the July-September term rose 48 per cent from the previous three months to 37 billion yen, partly on the strength of a wholly owned subsidiary in Bolivia involved with silver, zinc and lead operations. Meanwhile, Itochu Corp. (TSE:8001) saw its net profit soar 71 per cent to 34. 9 billion yen on recovering prices of coal and other natural resources, as well as improving profitability at its textile business.

Marubeni Corp.'s (TSE:8002) net profit shrank 12 per cent to 23.5 billion yen. But excluding a one-time profit booked in the April-June period for the sale of overseas power operations, its net profit effectively rose on a quarterly basis.

Sumitomo, Itochu and Marubeni left their full-year forecasts unchanged, citing concerns about the global economic outlook. Their automobile and steel materials operations continue to be hard hit by lackluster conditions.

(Nikkei) cg

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