Japan Tobacco has agreed to acquire Britain’s Gallaher Group for nearly £10bn (€14.9bn), the largest corporate acquisition by a Japanese company, it is reported today.

Japan’s foreign minister today pledged to smooth ties with China and South Korea after Prime Minister Junichiro Koizumi enraged the two Asian neighbours and sparked business jitters by visiting a war shrine that critics say glorifies Japan’s militaristic past.

Japanese prime minister Junichiro Koizumi’s stunning triumph in parliamentary polls has handed the leader a new mandate to harness his revitalised ruling party and turn promises into action for a range of sweeping economic reforms.

The three Japanese civilians taken hostage in Iraq have faced a whirlwind of criticism since returning home, it emerged today.

Japanese data this week will be sidelined by concerns over the release of policy announcements on Wednesday covering plans to speed up non-performing loan resolution and implement anti-deflation measures.