A move to tie up Japan's number one and number three steelmakers is a sign that the nation's bosses are at last responding to the urgent need for corporate restructuring.

It is the country's first steel-industry merger since 2002, and comes as rising raw-material prices and steely competition from other East Asian producers have exposed alarming over-capacity.

Japanese firms exported 795, 000 tons of steel to their biggest customer, South Korea, down 9.3% and falling into negative territory for the first time in 14 months.