A s far as corporate earnings reports show, Japan's economic recovery is moving in the fast lane, with many large companies chalking up record profits for the fiscal year that ended March 31, 2004. At the top of the list is Toyota Motor Corp., which reported group net income of more than 1 trillion yen for the first time. Consolidated pretax profits for companies listed in the first section of the Tokyo Stock Exchange totaled more than 20 trillion yen, an all-time record, according to economic think tanks.

The bad news is that there is little sense of prosperity among Japanese consumers. The profit surge reflects effects of corporate restructuring, including layoffs, as well as export-led economic expansion. Wages remain almost flat as employers continue to cut costs. Job prospects are bleak, particularly for young people.

Past economic recoveries had a pervasive spill-over effect on virtually every industry and sector, creating more income and jobs across the board. This one is uneven, reflecting structural divisions in the economy. An analysis of recent recovery trends and corporate results, based on official statistics on business corporations and gross domestic product, reveals a trend toward economic polarization, as illustrated broadly by contrasts between the vibrant corporate sector and the anemic household sector.