It also planned to spend 1.9 billion dollars over the next two years on restructuring in a drive to increase its global competitiveness.

The announcement came after Panasonic Electric Works and Sanyo Electric this month became wholly owned units of Osaka-based Panasonic, whose workforce numbered 366,937 at the end of March this year.

The planned job cuts will mean roughly a 10 percent reduction from March 2010 when Panasonic had 384,586 employees.

Company president Fumio Ohtsubo said the firm must integrate duplicated operations to boost the group's competitiveness.

"We are planning to streamline businesses overlapping with those of Sanyo," he told a press conference.

Ohtsubo did not elaborate on how the jobs would be cut, but local media said the company would offer early retirement incentives mainly at overseas production bases as well as to employees at its headquarters.

Ohtsubo said the company braced itself for tough times after the 9.0-magnitude earthquake and tsunami on March 11 ravaged Japan's northern region, which was home to many electronic parts manufacturers.

The natural disaster also battered a nuclear power plant, which has been releasing radioactive materials into the environment.

Ohtsubo said the disasters would depress Panasonic's sales in the April-June quarter by "several hundred billion yen".

"The earthquake hit many companies manufacturing materials and devices that are hard to substitute," Ohtsubo said.

"It is hard to restore (the supply chain) in a short time," he said.

He added that foreign customers' requests for verification that Panasonic products were not contaminated with radiation could delay restoration of the supply chain.

But the company managed to swing back to profit in the year to March, thanks to brisk sales offsetting the yen's strength and the impact of the March 11 disasters.

It reported 74.0 billion yen (906 million dollars) in group net profit for the fiscal year, reversing the net loss of 103.5 billion yen a year earlier.

Operating profit surged 60.3 percent to 305.3 billion yen with sales up 17.2 percent at 8.69 trillion yen, it said.

Panasonic gave no forecast for the current fiscal year to March 2012, saying: "It is difficult to assess the impact of the Great East Japan Earthquake."

earlier related report
Bank of Japan leaves key rate unchanged
Tokyo (AFP) April 28, 2011 - The Bank of Japan Thursday left its key rate unchanged as it continues to assess the impact of Japan's biggest recorded quake, a devastating tsunami and an ongoing nuclear crisis on the economy.

The bank kept its key rate at between zero and 0.1 percent and offered details of its 1 trillion yen ($12 billion) lending scheme for banks in quake-hit areas.

In a bid to ensure financial institutions in disaster-hit areas can meet demand for post-quake reconstruction funds, the BoJ earlier this month unveiled the scheme offering 0.1 percent interest one-year loans.

The central bank's policy board decided at its one-day meeting Thursday that each participating bank can borrow a maximum of 150 billion yen of funds. Applications for the funds must be made by the end of October 2011.

It also broadened the range of eligible collateral for money market operations for banks in affected regions.

The BoJ is expected to downgrade its forecast for real gross domestic product growth due to the March 11 earthquake and tsunami that plunged Japan into its worst post-war crisis.

Earlier in the month the BoJ warned of the pressures on an economy reeling from the disasters.

In the immediate aftermath of the earthquake, the BoJ injected a record amount of cash into the banking system and doubled its asset purchase fund to 10 trillion yen, a key policy tool it kept unchanged Thursday.

The central bank said deputy governor Kiyohiko Nishimura had proposed that it should increase the size of its asset-purchase programme to 15 trillion yen, an idea that was rejected by a majority vote.

The total cost from collapsed or damaged houses, factories and infrastructure such as roads and bridges is estimated at 16-25 trillion yen over the next three fiscal years, according to the Cabinet Office.

The estimate does not account for wider issues such as the unresolved crisis at the stricken Fukushima Daiichi nuclear plant, where radiation leaks have forced the evacuation of tens of thousands in a 20 kilometre (13-mile) radius.

Ratings agency Standard & Poor's on Wednesday cut its outlook on Japan's sovereign debt following the disaster and warned that reconstruction costs could pass $600 billion.

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