Tomoko A. Hosaka

“This suggests that the deterioration in financial conditions in Europe may be having a negative impact on demand there,” he said in a research note.

By sector, electrical machinery exports took a 10.7 percent hit as demand for semiconductors and audio equipment tumbled. Motor vehicles shipments slipped 0.6 percent from a year earlier.

Meanwhile, imports jumped 11.4 percent to 5.882 trillion yen as Japan bought more fossil fuels to meet electricity demand.

That resulted in a November trade deficit of 684.7 billion yen. It was the second straight monthly deficit.

The turmoil in Europe and the U.S. has driven up the yen as global investors flock to the currency as a relatively safe haven. The yen hit multiple historic highs against the dollar this year.

A rising yen shrinks the value of overseas earnings when repatriated and makes Japanese products less competitive in overseas markets. The yen has weakened to around 78 to the dollar recently, but exporters say it is still too high.

The currency levels have forced manufacturers including Nissan Motor Co. and Panasonic Corp. to shift some production overseas, a trend that could further undermine Japan’s exports.

Enthusiasm for the new machine among gamers could lead to some shortages at first, House said. But he said Sony can handle the expected load.

“I’m pretty confident … that there will not be major challenges in meeting demand, even though there may be short-term,” House said.

For the Tokyo-based electronics and entertainment giant, the Vita is the biggest product launch since the PlayStation 3 console five years ago.

A successful debut would help Sony offset the rest of its struggling business. It projects a loss of more than $1 billion for the fiscal year through March 2012. That would be its fourth straight annual loss.

The next-generation device is a touch-interface and motion-sensitive handheld that Sony hopes will be a strong successor to the PlayStation Portable. Gamers can connect over cellphone networks and Wi-Fi hotspots, and use GPS location-tracking technology.

The Vita has front and back cameras, a touchscreen in front, a touch pad on the back and two knob-like joysticks. It will enable gamers to play against each other using PlayStation 3 consoles over the Internet-based PlayStation Network, a system that was hit with a massive hacking attack earlier this year.

House touted the Vita’s advantages over rival Nintendo Co.’s 3DS, which had a disappointing start despite the company’s efforts to market its 3-D technology. Critics complained about a lack of interesting games. Nintendo ended up slashing prices on the 3DS after less than six months.

In contrast, two dozen software titles will accompany the Vita’s introduction — the largest number of launch titles in PlayStation history, House said. Games include “Uncharted: Golden Abyss,” ”LittleBigPlanet,” and “Wipeout 2048.”

House also questioned whether 3-D actually makes gaming better.

“If you see people out on the blogs saying, ‘I turned it off,’ then it’s not then really acting as a great game enhancer.”

The Vita’s Wi-Fi only model will cost $249.99 in the U.S. and euros 249.99 in Europe. The Wi-Fi and 3G-enabled Vita will retail for $299.99 and euros 299.99.

Game prices in Japan will range from 2,940 yen ($37.67) to 6,090 yen ($78).

Although the 3DS costs about 40 percent less than the Vita in Japan, House contends that the Sony device offers a “truly unique gaming experience” that will lure hardcore gamers as well as new gamers.

Both Sony and Nintendo are being challenged by the rise of smartphones and tablets, through which casual gamers can play inexpensive and simple games like the mega-hit “Angry Birds.”

House, however, said people will pay if it’s worth it.

“Clearly, if the experience merits it, I don’t think price is necessarily the barrier to entry,” he said, citing the $1 billion in sales racked up by the latest “Call of Duty” game by Activision Blizzard in just over two weeks. “The point is being able to give people a sense of value for money.”

House, a U.K. national, took over as president and CEO of Sony Computer Entertainment in September. He has worked at Sony Corp. for more than two decades.

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The result is slightly worse than Kyodo News agency’s average market forecast for a reading of minus 2.

Large manufacturers also don’t expect to feel better anytime soon. The central bank forecasts the index to fall to minus 5 over the next three months.

Japan has been battling a strong yen, which has hit multiple historic highs this year against the dollar. Amid Europe’s debt problems and economic uncertainty in the U.S., global investors have looked to the Japanese currency as a relatively safe haven.

But Japan relies on exports to drive growth, and the yen’s appreciation has hit companies such as Toyota Motor Corp. and Sony Corp. hard. When the yen climbs, it reduces the value of exporters’ overseas profits when repatriated to Japan.

That has forced companies to shift more production overseas, prompting worries about a hollowing out of Japanese industry.

The most pessimistic of the big manufacturing group was the electrical machinery sector — including audio and video equipment — which tumbled to minus 21 from minus 5. Companies doing business in petroleum products and heavy machinery also recorded big declines.

The auto industry, however, showed surprising resilience. Its index jumped seven points to 20, despite the yen and recent parts supply problems due to the flooding in Thailand.

Big non-manufacturers were feeling more optimistic as well. Their confidence index rose to 4 from 1 three months earlier.

The reading for medium-sized manufacturers was flat at minus 3, while the small manufacturers index improved to minus 8, up from minus 11.

The survey, which helps guide monetary policy, showed that large companies overall plan to boost capital spending by 1.4 percent this fiscal year through March 2012. The figure is down from 3 percent in the September survey.

Large manufacturing companies assume an average exchange rate of 79.02 yen per dollar for this fiscal year, compared with 81.15 yen three months ago.

Big companies expect profits to retreat 9 percent this fiscal year after jumping 46 percent last year.

The Bank of Japan surveyed 10,846 companies nationwide. About 99 percent responded.

The bank’s next policy board meeting is scheduled for Tuesday and Wednesday.

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Follow Tomoko A. Hosaka at http://twitter.com/tomokohosaka

The result is slightly worse than Kyodo News agency’s average market forecast for a reading of minus 2.

Large manufacturers also don’t expect to feel better anytime soon. The central bank forecasts the index to fall to minus 5 over the next three months.

Japan has been battling a strong yen, which has hit multiple historic highs this year against the dollar. Amid Europe’s debt problems and economic uncertainty in the U.S., global investors have looked to the Japanese currency as a relatively safe haven.

But Japan relies on exports to drive growth, and the yen’s appreciation has hit companies such as Toyota Motor Corp. and Sony Corp. hard. When the yen climbs, it reduces the value of exporters’ overseas profits when repatriated to Japan.

That has forced companies to shift more production overseas, prompting worries about a hollowing out of Japanese industry.

The most pessimistic of the big manufacturing group was the electrical machinery sector — including audio and video equipment — which tumbled to minus 21 from minus 5. Companies doing business in petroleum products and heavy machinery also recorded big declines.

The auto industry, however, showed surprising resilience. Its index jumped seven points to 20, despite the yen and recent parts supply problems due to the flooding in Thailand.

Big non-manufacturers were feeling more optimistic as well. Their confidence index rose to 4 from 1 three months earlier.

The reading for medium-sized manufacturers was flat at minus 3, while the small manufacturers index improved to minus 8, up from minus 11.

The survey, which helps guide monetary policy, showed that large companies overall plan to boost capital spending by 1.4 percent this fiscal year through March 2012. The figure is down from 3 percent in the September survey.

Large manufacturing companies assume an average exchange rate of 79.02 yen per dollar for this fiscal year, compared with 81.15 yen three months ago.

Big companies expect profits to retreat 9 percent this fiscal year after jumping 46 percent last year.

The Bank of Japan surveyed 10,846 companies nationwide. About 99 percent responded.

The bank’s next policy board meeting is scheduled for Tuesday and Wednesday.

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Follow Tomoko A. Hosaka at http://twitter.com/tomokohosaka

Verbal gaffes have also hurt the Cabinet’s image.

Noda’s first trade minister resigned just eight days into the job after making comments seen as insensitive to nuclear crisis evacuees. Now Defense Minister Yasuo Ichikawa’s days could be numbered as well.

Ichikawa is under fire for remarks made by his ministry’s top official in Okinawa, where plans to relocate a U.S. Marine air base face strong opposition. The official, who has been dismissed, reportedly likened the move to rape, implying that the government would force its way onto the island.

The resulting outcry further intensified after Ichikawa told parliament that he was unfamiliar with details about the 1995 rape of an Okinawan schoolgirl by three U.S. servicemen. The incident fueled anti-American sentiment and concerns over U.S. military presence.

The opposition Liberal Democratic Party plans to submit a censure motion again Ichikawa on Friday.

Among other topics, respondents in the poll expressed wariness over the government’s plans to raise the 5 percent consumption tax. More than half of those surveyed said they wanted a general election before a hike is enacted.

More than 71 percent said they wanted a realignment of political parties. The high figure suggests voters are unhappy with the status quo of two big political parties and several minor parties.

Kyodo randomly surveyed 1,021 eligible voters by telephone over the weekend. A poll of that size would typically have a margin of error of 5 percentage points.

The sample did not include areas in northeastern Fukushima prefecture that were evacuated because of the nuclear crisis spawned by the massive earthquake and tsunami last March.

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“From the viewpoint of stability, this is a matter of urgency,” Noda said at a news conference.

Noda did not give a timeline or say how the discussion would occur.

A revision could lead to discussion of allowing female members to succeed the currently male-only Chrysanthemum throne.

Emperor Akihito, 77, has only three eligible male successors — his two sons and a grandson.

Thursday marked the 10th birthday of Princess Aiko, the only child of Japan’s Crown Prince Naruhito and Crown Princess Masako.

Prince Akishino, the emperor’s second son, said he hoped he and his brother are given a chance to provide their views.

“Keeping the imperial family to a small number is not bad in light of national budget,” he told a news conference last month marking his 46th birthday. “Naturally, we need a certain number to maintain the imperial family as is.”

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Associated Press writer Mari Yamaguchi contributed to this report.